Women in the U.S. control about $14 trillion in assets, are becoming more educated than men, on average outlive their spouses and often inherit money from their parents—demographic trends which make the findings of a new Allianz Life study about financial confidence all the more puzzling.
While the past few years have put a spotlight on female empowerment, women say they are struggling to make progress with financial confidence and decision making,according to the 2019 Women, Money and Power Study* from Allianz Life Insurance Company of North America (Allianz Life).
In fact, the financial picture for women isn’t particularly bright when compared with the findings from the past few years, with women experiencing a steady downward trajectory on a number of key points:
- Fewer women say they are the breadwinner in their household (38% in 2019/47% in 2016/60% in 2013).
- Fewer women report having more earning power (42% in 2019/50% in 2016/57% in 2013).
- Fewer women say they are the CFO of their household (47% in 2019/51% in 2016/53% in 2013).
Additionally, respondents to the survey also say they feel less financially secure overall (62% in 2019 vs. 68% in 2016).
What gives?
“These findings were quite surprising because women have come a long way when it comes to our roles in work and family, yet we don’t feel prepared financially,” said Aimee Lynn Johnson, vice president of financial planning strategies, Allianz Life. “This begs the question, at a time when women are accomplishing so much, why aren’t they feeling more empowered about their financial future?”
The answer is complicated, Allianz says, but could be partly chalked up to angst around ongoing market volatility.
“Women might be feeling worried about what they see happening in the markets, since nearly half of women say volatility in the market is making them anxious,” said Johnson. “Despite women doing well in many other areas of their lives, this could be weighing heavily on them and translating to how they feel about their own finances.”
The study also indicated over half (57%) say they wish they were more confident in their financial decision making.
“There is a lot of discussion on female empowerment and the accomplishments women are making, including the fact that more women are graduating from college than men, and the narrowing of the wage gap over time, just to name a few,” said Johnson. “But the disconnect between these accomplishments and the lack of financial confidence suggests perhaps those conversations need to refocus on female financial empowerment.”
One bright spot identified by the study was with long-term financial planning (while not singling out retirement planning in particular). Despite some of the backward steps they are taking in their personal finances, women say they are taking on more responsibility for managing household long-term savings and finances (90% in 2019 vs. 86% in 2016).
Some groups stand out
While the majority of women are lacking certainty around finances, specific groups say they are feeling more secure and confident in their financial decision making.
Millennial women are taking charge and playing a more active role in their finances. They are more likely than other generations to have asked for a promotion or raise at work, and over half say they have more earning power than ever before.
Additionally, Millennial women aren’t as fazed by recent market volatility. Nearly half (49%) say they are comfortable with current market conditions, and are ready to invest now (compared with 29% or Gen Xers and 37% of baby boomers).
Confidence is also on the rise for divorced women who are feeling more financially secure (65% in 2019 vs. 50% in 2016). What’s more, divorced women feel increasingly on track financially the longer they have been divorced. Women who have been divorced for more than 10 years say they have a better understanding of financial products they own, are better about setting and achieving financial goals, and are better about saving for long-term goals compared with women who have been divorced for less time.
The role of the financial advisor
Only a quarter of women in the study say they currently have a financial professional, which is down from 30% in the 2016 study.
Of those that are working with one, over half (60%) say that their financial professional treats their spouse/partner as the decision maker, which may cause women to feel less independent (81% in 2019 vs. 87% in 2016) or confident (83% in 2019 vs. 91% in 2016) as a result of working with a financial professional.
“Women need to be empowered in all aspects of their lives, especially when it comes to finances,” said Johnson. “They can start this process by working to educate themselves more on financial topics and products, by not being afraid to broach the oft-thought taboo topic of money, and seeking out a financial professional who understands some of the unique financial challenges that women face today.”
* The Allianz Life Women, Money, and Power Study was commissioned by Allianz Life Insurance Company of North America via an online survey in April 2019 with a nationally representative sample of 900 women, ages 25-75, with household income of $30,000/year or higher. Some questions were resurveyed from the 2013 and 2016 Allianz Women, Money, and Power Studies.
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
