Possessing a strong sense of financial wellbeing is crucial when it comes to overall happiness within the world. Our finances have the potential to cause us additional stresses both in the present and for the future.
Recent research has highlighted a range of financial wellbeing issues that need addressing when looking at the split between men and women, as well as how the pandemic has factored into these problems.
The difference between men and women
According to the survey carried out by Saunderson House, a wealth management firm in London, women have a lower sense of financial wellbeing when compared to men considering the same aspects.
Both men and women chose the same three things as their main factors for determining financial wellbeing:
- Having wellbeing in other walks of life (mental, physical);
- Feeling happy with the current state of their finances;
- And having clarity and confidence over future financial plans.
The crucial difference here is how capable the different respondents perceived these areas. Across the board, men reported that they felt they were more confident in these areas of their lives, while women felt like achieving these things in their lives were more difficult.
This doesn’t come down to either men or women being better at managing their finances, rather how different people within their respective genders view their financial responsibilities. Reasons that were given included:
- Women balance more plates between work and home life, leaving less room for planning finances or finding a trustworthy adviser
- Women take a more holistic approach to finances, rather than a siloed approach that’s more typical of men, meaning decisions carry more pressure
- Women feel like any investments they make require a higher degree of responsibility and must be done carefully
- Women believe that financial advisors don’t understand their goals or aspirations, reporting a significantly lower score than men
How has the pandemic affected this?
When all respondents were asked to consider what worried them most in terms of their financial independence and financial wellbeing, the top three concerns were:
- deterioration in wellbeing in other walks of life;
- the fallout from the Covid-19 pandemic;
- and a slowdown in the global economy.
These are all intrinsically linked to a shift in thinking following the outcome of Covid-19, overtaking all other concerns which were given, including losing a job or a spouse losing their job. The mental health of women was significantly impacted from the outset of the pandemic, with money problems playing a central role within this. Those who experienced difficulties with their finance saw a substantial decline in their wellbeing.
However, the pandemic has also seen more women engaging with financial resources to help rebalance issues in terms of managing personal finances. Female-fronted financial podcasts targeting the female demographic have taken off during the pandemic, appealing to those who feel that previous financial advice didn’t speak to their specific needs.
What steps can the finance industry take to close the gap?
Addressing the disconnect between financial advisors and women seeking financial advice is paramount to mending financial wellbeing concerns.
Understanding the specific needs of women in relation to money will help to provide better advice, considering areas such as additional savings needed for maternity leave, gaps in pension contributions, etc.
Wider improvements are needed from employers to fix the inequalities that women face in the workplace, both financially and otherwise. Financial advisors need to tailor their advice further to consider these shortcomings and how women can overcome these while the bigger systemic changes haven’t come to fruition.