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Women and Wall Street: How the Conversation Has Changed

When Emerson wrote: “Adopt the pace of nature: her secret is patience “, he could hardly have foreseen how true those words would ring with respect to women being recognized by Wall Street as the most powerful  economic demographic to be reckoned with. 

Thirty years ago when I first started practicing as a new financial advisor at one of the most venerable firms on “The Street", I remember my astonishment that women were barely recognized as decision-makers in their marginal role as "the wife of the client".  I immediately set about changing that by creating and presenting financial education seminars exclusively for women.  Management thought I was crazy when I suggested that we should initiate a women-centric financial education program.  Needless to say, I continued on my own to reach out to female audiences as a band of one. 

“And the Spring comes slowly up this way. “ Samuel Taylor Coleridge

Last week a major milestone for women was reached as a substantial presence in financial services (a subsidiary of BNY Mellon Bank) published a report calling out the import of women as the most significant consumer entity ... and one not to be ignored: “Women Are Not a Niche Market; They Are a Significant Business Opportunity “.  Acknowledging women’s vast economic power, the real watershed achievement reflected in the report was the first-ever  recognition by the "The Street" that there are significant differences in working with women clients, which financial advisers will need to fully understand in order to meet - and exceed - women’s unique needs and expectations. No longer is it something that is said with a slight smirk and a sly wink.  No less, a leading financial institution calling out to its peers that: 1) this is a real phenomenon and 2) that it's time to look at seriously changing sales and marketing strategies, if they expect to maintain and grow their presence with this newly identified buyer. 

This is indeed momentous for it legitimizes in the most credible way what has been bubbling for a long time beneath the surface. It radically changes the conversation. Those firms I work with who have been early adopters are well on their way to a paradigm shift that isn't all that hard to deploy, but they recognize that there is more to it than just talking more with women clients and making sure to ask how the kids are doing at school. 

There are many layers to the behaviors, attitudes, and roles that comprise the unique differences of women as investors.  It goes deeper than the Men Are from Mars and Women Are from Venus rubric.  Antiquated presentation methods aren't effective and the selling style that has always worked with men is a turn-off for women.  Women may have a long way to catch up, but different doesn't mean dumb.  Understanding the Why and the How of approaching them differently is crucial.

Finally the gap that has divided women and the financial world for so long closes markedly. And I say:  It’s about time you two should meet.

 

Behavioral Finance: New Year; New Habits

Lose Weight ... Work Out More ... Cut Back on Spending ... Get a Financial Plan – Sound familiar?

We all start with strong resolve and we are determined to crack the nut this time. But then what happens?

The Willpower Trap

Funny that this runs contra to everything we’ve previously been told: If we just have enough willpower we’ll be able to make that change … almost overnight. And yet that’s not the typical result.

Are we really that weak in our resolve? Behavioral science says “No”.  

Willpower alone is not the key ingredient, and our thinking that it should be often creates a new dilemma, instead of getting us to our goal.  So best to avoid that trap.

Women In The Bulls Eye: The Good, The Bad, and The ...?

The Good:The Age of Women Is Now Fully Recognized

Well, finally, some 40 years after Gloria Steinem and other feministas did those unthinkable things to bring on the revolution, they are noticing. "They" being everyone from Madison Avenue marketers to Wall Street ... and even more recently from the heights of the president of the World Bank. The demographics - and actuarial tables - are finally indisputable.

Meanwhile women are rockin' it, and "They" know we're going to bring it.

The big questions are: Do we know? ... Are we prepared? ... and, as importantly ... Have we stepped up to full ownership?

New Neuroscience Study Says Women Make Better Investors

Neuroscience Says Women Make Better Investors, But Why?

"Women are better wired than men to avoid emotionally driven investing mistakes." Women's more highly developed emotional processing capabilities make it possible says the latest from neuroscience research. Neuroscience Tells Us So While our general tendency of "risk-aversion" continues to leave too many women at impasse regarding investing, those who have taken the plunge seem to actually have an advantage over men according to the findings of Richard L. Peterson, psychiatrist and author of Inside the Investor's Brain (Wiley Trading, 2007) and co-author of MarketPsych: How to Manage Fear and Build Your Investor Identity (Wiley Finance, 2010).  Peterson points to women's higher levels of oxytocin and a thicker corpus callosum (fibers connecting the two halves of the brain) as likely reasons for the differential between the sexes and the basis for his survey results showing women as:

Why Are My C.D. Rates So Low?

Yes, there's no denying it: Interest rates are abysmally low right now. Understanding "why" and the impact on your bottom line, can make a big difference in how you use C.D.'s in the future.

What are interest rates anyway?

Simply put, interest rates can be defined as the “Cost of Capital”, which to put in regular language just means the 'cost of doing business'. Let's take a look:

You don’t have to Spend Less this holiday season… you just have to Spend Right!

The holidays are around the corner, the time of year when things get a little crazy and, unless you’re careful, all that hard work you’ve done on cutting back spending can go out the window. But don’t worry! With a well-laid plan for spending these holidays, you can save yourself some moolah—and some anxiety!

Why not start now?  It won’t take more than 15 minutes here or there to come up with your holiday spending plan.  The below section will calculate your target "spend rate”—the amount that you can reasonably afford this holiday season—and teach you how to adjust as you go along so that you stay within that target.  

What the Fluff? The Truth to Prioritizing your Budget

From our readers’ corner:

Lately I’ve receive a lot of questions from readers, as well as my clients, trying to decide what percentage they should be spending in a particular category of expenses in order to maintain more proactive and empowered financial behaviors.  This is an excellent question and glad that all of you readers realize the importance of “owning” your money!

While it can seem interesting or even fun to see how much you’re spending in a category vs. your neighbors, these percentages are NOT the Holy Grail you should be focusing on.  It only has meaning if you’re comparing yourself to others!  In other words the percentages are a ‘relative’ measure and only have meaning when compared to someone else’s results.  While I agree that it makes cute  and easy to understand pie charts, in terms of how to end up with more money for saving and investing, this is not where to focus your attention.

Do the New Credit Card Rules Affect You? (Hint: Yes, They Do!)

As many of you have heard by now, the Federal Reserve Board approved several new rules providing credit card protection from high and often unreasonable late and penalty fees. The new rules, which will go info effect on August 22, 2010, are meant to ensure that these fees are less costly and more fair for consumers.

The new rules are an amendment of Regulation Z, which implemented the older consumer credit protections established in the Truth of Lending Act of 1968. Since these rules are over 40 years old, the rights they provided are much more limited in comparison to the new amendments.

For example under Regulation Z a late fee payment would be the same amount for a $30 minimum payment as it would be for a much higher payment such as a $70 minimum payment. Under the new rules; however, credit card companies can charge a maximum late fee of $25 with only a few exceptions. 

Here is a breakdown of the rules that you will want to know about: