Long live housewives. May their economics reign. I've come to this position after reading Women of Wealth, a study produced by the Family Wealth Advisors Council, a nationwide network of independent wealth management firms.
The WoW study claims to delve “deeply into the critical issues facing successful women today." It was based on 551 women with an average age of 55; 48% worked full-time, 70% were married, and 62% had a net worth greater than $1 million. The women with a net worth greater than $5 million made up 11% of the respondents.
This report is, to my mind, a classic example of that hackneyed literary genre known as "financial services finally discover the importance of women." There is, like other examples of this kind, much gushing over the fact women control 51.3%, or $14 trillion, of the nation's "personal wealth"; that 67% of women manage the "family budget"; and that they collectively control $20 trillion in consumer spending and are responsible for 83% "of all consumer purchases."
To this add some icky-sounding advice. Example: Because widows outlive their husbands by 14 years on average, the report instructs financial advisors to start early pawing the hand of these would-be-widows in waiting. That's because "up to $25 trillion will accrue to women through 2030 via generational and spousal transfer. By then, at least two-thirds of the nation's wealth will be in women's hands."
That, apparently, is a big problem for today's male-focused financial advisors. "In many cases advisors have regarded the husband as the "?primary' client and failed to see the woman as a client with her own concerns. It is no wonder that an estimated 70% of women who are widowed change advisors within one year."
Married women are hereby warned: expect an increased level of obsequious fawning from your husband's financial advisor.
But, to be fair, the FWAC study does also offer convincing evidence that the ”woman at home” won't be easily duped by financial hucksters. Probably because retired women do more due diligence in the advisory selection process, FWAC found almost twice as many retired women as working women "believe it's critically important that their advisor be fee-only."
This independent advice perhaps explains why 55% of retired women also believe it is "critically important” their wealth advisor “act as a quarterback with their other advisors." That figure jumps to over 80% for women who have never worked outside the home. In contrast, just 37% of working women have similar expectations of their financial advisors.
Translation: stay-at-home women are far more inclined to pay for uncompromised financial advice from a trusted advisor, culled from a rigorous due diligence process, and then have this independent advisor help them execute their financial strategy by finding best-in-class financial products.
So much for the little widow falling easy prey to financial hustlers. She sounds pretty savvy to me. It is in fact working women, according to this report, who are more likely to think they can figure things out on their own by purchasing commission-loaded financial products directly from brokers and financial planners.
Another example of the humble common sense and sophisticated financial goals of the “housewives" was found in legacy issues: well over 70% of the women who never worked, and almost 50% of retired women, think it is "critically important that their advisor help factor in desires for children and community into legacy plans." Less than 40% of working women had the same belief.
The WoW report should in fact make us all admirers of the “housewife” economic worldview which the former British Prime Minister, Margaret Thatcher, famously championed. Charles Moore recently reminded in the Wall Street Journal that Thatcher "preached that a household "“ and, most particularly, the woman who runs its weekly budget "“ knows that you cannot spend more than you earn and that you must "?provide for a rainy day.' The same mythical housewife, Mrs. Thatcher asserted, also knows that if you do not provide you cannot be certain that anyone else will. Living beyond your means leads to dependency instead of independence, and dependency leads to degradation."
This much-derided “housewife” who shaped Thatcher's economic decisions, mythic though she may be, introduced, among other radical reforms, the idea that privatizations can be a means to pay down government debt and help the state live within its means. Thatcher's economic vision famously fell out of favor in the go-go years of the subsequent two decades, of course, but how supremely wise this “housewife” worldview looks today.
May she reign again. Soon.
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Written with Barron's wit and often-contrarian perspective, Penta provides the affluent with advice on how to find the hidden value in wealth management, how to make savvy acquisitions ranging from vintage watches to second homes, and how to smartly manage family dynamics.
Richard C. Morais, contributing editor at Barron's, was formerly Forbes magazine's European bureau chief in London, where he won multiple Business Journalist Of The Year Awards. Returning to the US in 2003, he focused on family wealth issues and chaired the Forbes Family Business Forum. In 2009, he left Forbes to launch his career as a novelist. His debut novel, The Hundred-Foot Journey, is an international best seller in active film development. Scribner is publishing his second novel, Buddhaland Brooklyn, in July, 2012.
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