Turns out, women have an extraordinary amount of power. Here’s why.
Whether you’re a woman in your 20’s or your 60’s, you hold enormous power. The power to choose.
An estimated 70 percent of women leave their financial advisor within a year of being widowed. Once both spouses die, that number can swell to over 90 percent of relationships leaving the financial advisor.
Let that sink in.
You can put them out of business
Traditional financial advisors stand to lose a significant amount of business as Baby Boomers begin to retire. The greatest intergenerational wealth transfer is happening, and financial advisors are at risk of losing clients.
Financial advisors at brokerage firms, who aren’t fee-only, are paid based on two metrics.
1) The number of new clients signed up.
2) The amount of new money brought in from current clients.
They want your ‘assets under management’ or under their management. The system is net, balancing losses against gains. So for every dollar and client lost, they need to work twice as hard to get back to “even”, (directly translating to the paycheck they get). Which means losing clients really hurts.
Knowing women live longer than men, financial advisors should make sure you’re comfortable with the conversation around investment decisions. But the truth is, if they don’t have a good relationship with you, that advisor is nervous you’ll eventually split. Dragging your money bags along with you, of course.
Leaving isn’t that hard to do
And it’s getting easier. An investment account can transfer between financial companies ‘in-kind’, meaning you don’t need to sell anything to transfer it. Retirement accounts aren’t subject to capital gains taxes if you end up selling anyway. Paperwork may be excessive, but that’s across the financial industry.
The financial firm you’re leaving will almost always charge an account closure fee. In the range of $50, give or take. Most of the, time the company you’re transferring account to will reimburse you for that fee, if you ask. So just ask.
You too, can figure out what the #!*$ is going on
I’m sure you’ve had an experience where you finally did something you were initially hesitant to do. And once you did it, the ‘veil’ was lifted. Pretty soon you’re no longer scared of things that once made you break into a cold sweat.
Like starting a new workout routine (CrossFit anyone?) or taking an international flight to a new country. Sure as hell you’re scared when you don’t know the language or traffic laws. But after a few days, once you’ve learned the flow of society, you begin to appreciate the quirks that drove you crazy at first.
And after you’ve taken your first trip abroad, you’re hooked. You’ve ‘been bitten’ by the travel bug. You can’t stop thinking about your next trip. Where will it be? Can you go somewhere more remote… more foreign? Will the destination require you to travel by foot or by animal? Even better!
Investing is no different than traveling to a foreign country, except it’s mostly run by men. Wait a second…
Investing is no different than traveling to a foreign country. End of sentence.
Meaning, you might actually enjoy doing it.
You just need to take your first step
I don’t know what your first step is, financially speaking. It could be finally contributing to a Roth IRA. It could be learning about your new stock options plan (congrats on the promotion, btw!). Maybe it’s contacting someone about student loan consolidation so you can contribute more to your portfolio.
Whatever it is, you just need to take one step. Then another. And soon you’re feeling confident about your ability to handle investing.
As Marie Forleo says, everything is figureoutable.
I wish all women knew how much they were capable of understanding. (I’m talking beyond budgeting here, because you could budget your life away). There isn’t anything to be fearful of. Quite the opposite. We just need to take one step forward. To book the flight, so to speak.
This post is part of the #WomenRockMoney Movement, a large group of female personal finance bloggers who have come together to inspire more women to learn about money. If you have money questions, or want support for your financial goals, learn more about how you can join us at the movement homepage.Whether you’re a woman in your 20’s or your 60’s, you hold enormous power. The power to choose.Click To Tweet