Financial advice for women: Does your client’s gender matter?

What is the history of women in finance?

Women have defied historical norms to establish themselves in the financial world, a sector long dominated by men.

For much of history, societal expectations confined women to domestic roles, keeping them out of finance and other professional arenas.

However, the tide began to turn with the women's suffrage movement in the early 20th century, which set the stage for broader female participation in the workforce, including finance.

By the 1960s and 1970s, the feminist movement accelerated this progress, with more women in finance making a name for themselves.

Despite these strides, gender inequality and stereotypes endured, casting doubt on women's abilities to excel in finance.

Nevertheless, women persisted, challenging these barriers and advocating for equal opportunities.

Today, women in banking and finance hold prominent positions in international financial institutions, banks, investment firms, and financial regulatory bodies worldwide.

Their journey is testimony to a steadfast commitment to overcoming obstacles, from the glass ceiling to unequal pay and reshaping the financial industry's landscape.

Who are the most famous women in finance?

The shift towards gender equality in finance is ongoing, but the trailblazing efforts of pioneering women have paved the way.

Here are five of the most influential women in finance:

• Muriel Siebert: Known as the "First Woman of Finance," Siebert was the first woman to own a seat on the New York Stock Exchange. Her tenacity and vision opened doors for many women in finance, trading and investment.
• Christine Lagarde: Lagarde was the first woman to head both the International Monetary Fund (IMF) and the European Central Bank (ECB), and she remains a formidable force in international finance.
• Abigail Johnson: Celebrated as the visionary CEO of Fidelity Investments, Johnson is renowned for her strategic leadership and transformative impact on one of the world's largest asset management firms.
• Mary Callahan Erdoes: As CEO of J.P. Morgan Asset & Wealth Management since 2009, Erdoes is one of the most famous women in finance and has led with strategic vision, overseeing trillions in assets and expanding the firm's global reach.
• Sallie Krawcheck: A former head of Bank of America's Global Wealth and Investment Management division and co-founder of Ellevest, an investment platform tailored for women, Krawcheck is a vocal advocate for financial literacy and gender parity in finance.

What are the challenges for women in finance?

Women in banking and finance face unique challenges when managing their financial situation, both on a professional and personal level.

These obstacles often stem from deep-rooted societal structures and personal circumstances that differ from those typically experienced by men. 

Here are five significant challenges:

Male-dominated environments

Navigating a male-dominated environment is a significant challenge for women in finance.

These environments can be intimidating and isolating, making it difficult for women to find mentors, network effectively, and gain the respect necessary to advance.

The culture in many financial institutions still subtly perpetuates gender biases, often leading women to be underestimated or overlooked for promotions.

Examining the percentage of women in finance reveals that approximately 46% of employees in the sector are women, yet only 15% hold executive roles.

This indicates that while women can get their foot in the door, advancing to leadership positions remains a significant challenge.

Gender pay gap

The gender pay gap remains a stubborn issue, with women in finance and other sectors often earning less than their male counterparts for the same roles.

This disparity affects women’s ability to save, invest, and accumulate wealth over their careers.

It also impacts retirement savings, given that lower lifetime earnings translate into lower pension contributions and savings.

Lifespan

Women generally live longer than men, which poses unique financial challenges.

A longer lifespan means that women need to save more for retirement to ensure their funds last through their extended years.

This necessity is compounded by the fact that women may have lower lifetime earnings due to career breaks and part-time work, making it harder to build a robust retirement nest egg.

Gender-related health issues

A 2023 survey by workplace-healthcare provider SimplyHealth revealed that over 23% of working women aged 40 to 60 considered resigning due to the challenges of menopause, while 14% reported plans to hand in their notice. 

Health issues unique to women, such as menopause, can significantly impact their careers and financial stability. 

These health challenges can lead to reduced earning potential and increased medical expenses, further complicating financial planning.

Family commitments

Family commitments disproportionately impact women, affecting their career progression and earning potential.

A study commissioned by the government in 2018 found that women and men experience a large divergence in their career paths following the birth of a baby, with only 27.8% of women being in full-time work or self-employed three years after childbirth, compared to 90% of new fathers. 

Women often take on the primary caregiver role, leading to career breaks or part-time work, which subsequently affects their financial security and advancement opportunities.

How could you change your approach to giving financial advice to women?

To offer effective financial advice for women, a tailored approach is essential.

Recognise the unique challenges they face and offer strategies that address these specific needs.

First, acknowledge the male-dominated environments and support women in building robust networks and finding mentors who can provide guidance and advocacy.

Encourage them to seek out professional organisations and networks that promote female advancement in finance.

Second, tackle the gender pay gap by advising women to negotiate salaries assertively and explore opportunities for career advancement.

Provide insights into industries and roles where women have achieved pay parity or excelled.

Third, consider their longer lifespan in retirement planning. Encourage higher savings rates and investment in growth-oriented portfolios to ensure their retirement funds outlast their years.

Fourth, address gender-related health issues by discussing the importance of health insurance and savings for unexpected medical expenses.

Provide resources and support for managing health challenges without compromising their financial stability.

Finally, help women to navigate family commitments by offering flexible financial planning strategies that accommodate career breaks or part-time work.

Highlight the importance of maintaining retirement contributions and building emergency funds to provide financial security during life transitions.

By adapting your advice for women in finance (and other professional sectors) to meet their specific needs, you can empower women to achieve greater financial independence and security.

Want to work with Unbiased?

Women in finance have overcome considerable obstacles to establish their presence in a traditionally male-dominated field.

Despite ongoing challenges such as gender pay gaps, health issues, and family commitments, they continue to break barriers and advance in their careers.

Recognising and addressing these unique challenges through tailored financial advice for women can empower them to achieve greater financial independence and security.

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