September 7, 2006

Money Advice for Boomer Women: Get an Adviser

Many Could Reap Benefits From Professional Help With Financial Issues

By Victoria Knight

Carole Cross, an Internet blogger from Colorado who runs her own coaching business and has a zest for life, is a typical baby boomer in many ways except perhaps one: She has a financial adviser.

Many boomer women have successful careers, have accumulated wealth, and are likely to inherit money as they age, making them attractive clients for firms. At the same time, because of their changing role in society, the economy and in the home, they are facing an increasing amount of personal responsibility for managing their own finances.

But although women who work with a financial adviser report higher levels of satisfaction and clarity about their investments and say they feel more financially secure, fewer than one in five women currently has an adviser, according to a recent study conducted for Allianz Life Insurance Company of North America, a unit of Allianz AG, and Age Wave business consultants.

In addition to holding a growing slice of the U.S.'s wealth, women are generous with referrals and, though they are less willing to take risks than men when it comes to investing, women are more likely to stick to their decisions, advisers say. Studies by OppenheimerFunds, Prudential Life and Allianz Life, among others, back up the anecdotal evidence.

David Zirretta, a Pikesville, Md., senior vice president of wealth management at Citigroup's Smith Barney, says his boomer women clients want to know what is going on with their finances 24/7. So Mr. Zirretta is using his BlackBerry to keep them up to date on world events that might affect their financial lives and alert them to areas that need attention.

Mr. Zirretta says boomer women respond well to informal, interactive learning experiences. Each month he organizes get-togethers for clients and their friends at a local coffee shop or bookstore where they have chats (not lectures) about topics such as how to handle a real-estate transaction or care for a sick relative. Mr. Zirretta also is involved with various women's investment clubs, where he answers questions and gives advice on financial planning.

Boomer women, for example, are likely to work fewer years than men as they take time out of the work force to have children, care for elderly parents, or supervise adolescent children who are still living at home. This time out of the work force can affect their retirement savings. In addition, boomer women are more likely to have health care through their husbands'
job: 40% versus 14% for a man. High divorce rates and probability of widowhood can take their financial toll on women because they result in the loss of one of two Social Security checks and potentially the loss of a pension check or health-care coverage.

Women boomers tend to be focused on the present and haven't given much thought to how they will finance their future, says Kathleen Beichert, Senior Vice President of Retirement Plans at OppenheimerFunds. An OppenheimerFunds survey showed that while 90% of women say retirement is their top financial goal, less than half participate in a retirement plan.
So advisers can help women get on track by showing them the financial difficulties they will face if they stay on their current course of saving and spending.

"Advisers can take a look at the implications of a long life expectancy, the impact of inflation, potential issues associated with relying on a spouse's pension or health benefits, the timing of Social Security and Medicare benefits, and the dangers of carrying debt into retirement," Ms.
Beichert says.

Women are more than twice as likely as men to choose a female financial adviser, according to the Allianz Life study, which puts the figures at 26% and 12%, respectively. But only 20% of advisers in the U.S. are women, creating a conundrum for the industry. The study didn't examine the reasons behind the gender preferences, but Marti Barletta, the author of a forthcoming book, "Prime Time Women," about how to market to women between the ages of 50 and 70, says differing communication styles play a role.

She thinks male advisers often miss cues to respond. For example, a man might come to a male adviser's office and say "I am looking for a return of X in Y type of investment." By contrast, a woman might come to an adviser's office and say, "My kids are in college and my mother-in-law has fallen sick and I want to help out."

"This isn't small talk. This is where she is telling you what she wants from an investment," Ms. Barletta says.