Fidelity Finds ‘Personal Finance’ May Be Too ‘Personal’ To Discuss

February 12, 2015 by Business Wire

BOSTON–(BUSINESS WIRE)– A new study by Fidelity Investments^® found that women overwhelmingly want to learn more about financial planning (92 percent) and get more involved in their finances within the next year (83 percent). However, open conversations about money remain rare. Even among family and friends, eight in 10 women confess they have refrained at some point from talking about their finances with those they are close to. The number one reason given for avoiding these discussions is that the subject is “too personal.” (Watch this video to hear how women talk about money).

The Fidelity Investments Money FIT Women Study finds this reluctance to talk about financial topics also occurs among married couples and partners – where financial assets are generally shared. Furthermore, while 77 percent of women are confident discussing medical issues with a doctor on their own, less than half (47 percent) say they are confident talking about money and investments with a financial professional.

“Beneath women’s reticence to talk about money lies a lack of confidence in their knowledge of financial planning and investing,” said Kathleen Murphy, president of Personal Investing at Fidelity. “This confidence-gap is really unwarranted. Studies show that women actually demonstrate stronger saving rates than their male counterparts and have historically enjoyed better long term investment performance when they do engage. Unfortunately, too many women still hesitate to take control of their investments.”

Given that nine in 10 women will be the sole financial decision maker of their household at some point in their lives¹, it is imperative they have a solid understanding of how to manage their money and invest for the future. Not making this a priority can put their future at risk, and have a ripple effect on their family’s financial security, especially when faced with an unexpected life event that makes taking control of one’s finances a necessity.

Overall, 60 percent of women worry about having enough savings to last throughout retirement, with financial anxiety most prevalent among Gen X and Y women (born between 1965 and 1996). For many women, a lack of confidence is driven by a need for more in-depth understanding and experience with the investment process. Women who are not confident in making financial decisions cite these reasons:

• Haven’t done research about my options (37 percent)
• Don’t have much experience because I haven’t done much with my finances to date (36 percent)
• Don’t know who to talk to in order to get the best advice (36 percent)

Further compounding the challenges holding women back are competing demands for their time both at work and at home.

Flipping the Mind Set: Women Have What It Takes to be Successful Investors

While experience, confidence and prioritization remain obstacles to becoming more actively engaged in their finances, the good news is that many women are developing strong savings habits, and three-in-four women surveyed (74 percent) are proactive about saving for the future.

Fidelity’s customer data² supports this, finding that women at every income level contribute a higher percentage of their salaries toward workplace retirement savings plans than their male counterparts. Working women also show more age-based asset allocation behaviors than their male counterparts. For example, looking specifically at women in the health care and higher education professions, industries in which women dominate the workforce and where Fidelity is a leading provider of retirement savings plans, analysis shows that 67 percent of women exhibit age-based asset allocation, compared to 61 percent of men³.

“Women are much more capable than they often give themselves credit for,” said Murphy. “The same discipline that makes them dedicated savers can also be applied to investing. The key is to take action now to ensure the money they’ve worked so hard to earn is working just as hard for them to achieve their goals and live the lives they deserve.”

Five Ways to Get More Financially Engaged

When appropriate, even small adjustments to savings rates or investment plans may have a big impact over time. Whether women prefer a do-it-yourself approach, want professional support or fall somewhere in between, here are five opportunities to become more engaged:

1. Kick-Start Your Financial Education at Your Own Pace: There are numerous tools, tips and reference materials online, including on www.fidelity.com/itstime, which can help women boost their financial knowledge to the next level. Fidelity also offers weekly Viewpoints on timely topics such as Women and Money, including the latest, “Women and Money: How to Take Charge.” For those who need a little more help getting started, Fidelity hosts workshops specifically for women, titled THRIVE. Workshops are available at Fidelity Investor Centers across the country, and can also be delivered in the workplace.
2. Take Advantage of Workplace Retirement Guidance: Many employers offer on-site financial workshops and guidance, yet the study shows that sixty-five percent of women are not taking advantage of retirement guidance made available to them through their workplace plan provider. Check if your employer offers onsite financial workshops or 1:1 guidance, sign up if available, or contact a financial services provider directly.
3. Work with an Expert: A financial professional can be a valuable resource to turn to with questions and to help build a roadmap for the future. When choosing an adviser, look for a good listener who communicates clearly about fees, professional designations, and investment advice. Interview the adviser before you make a commitment, to make sure you are comfortable and can build strong working relationship.
4. Find a Financial “Buddy”: By making time on a regular basis to discuss financial matters with a trust-worthy friend, family member, mentor or financial expert, tackling financial goals can become less overwhelming and more attainable. In the same way that “gym buddies” keep each other motivated, financial confidantes can help both parties make progress and stay accountable.
5. Join an Online Conversation: Take advantage of online conversations with other women looking to get more involved in their finances, as well as experts providing insights and guidance. Kathleen Murphy shares her perspective on life and money in her LinkedIn Influencer series exploring the importance of women engaging with their finances. Consider a similar approach and share with your social networks how you plan on taking a more active role in your financial future.

For more information and help getting started, contact 1-800-FIDELITY, set up an appointment at one of 184 investor centers nationwide or visit Fidelity.com.

About the Fidelity Investments Money FIT Women Study

The Fidelity Investments Money FIT Women Study was conducted online between October 6^th and October 30^th, 2014 among 1,542 American Women Ages 18+. All respondents were employed or retired and had to have a qualifying retirement plan such as a 401(k); 403 (b); 401(a) or 457 (margin of error +/- 2.5%). In addition, 446 women in health care and 384 women in higher education, fitting the same criteria, were interviewed for a specific look at women in these industries. Fidelity Investments was not identified as the sponsor and the survey was conducted by Kelton, a leading global insights firm.

About Fidelity Investments

Fidelity’s goal is to make financial expertise broadly accessible and effective in helping people live the lives they want. With assets under administration of $5.1 trillion, including managed assets of $2.0 trillion as of December 31, 2014, we focus on meeting the unique needs of a diverse set of customers: helping 23 million people investing their own life savings, 20,000 businesses to manage their employee benefit programs, as well as providing 10,000 advisory firms with technology solutions to invest their own clients’ money. Privately held for nearly 70 years, Fidelity employs 41,000 associates who are focused on the long-term success of our customers. For more information about Fidelity Investments, visit www.fidelity.com.

Investing involves risk including the risk of loss.

Fidelity, Fidelity Investments, Fidelity Viewpoints and Fidelity Investments and the Pyramid Design logo are registered service marks of FMR LLC.

Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917

Fidelity Investments Institutional Services Company, Inc., 500 Salem Street, Smithfield, RI 02917

National Financial Services LLC, Member NYSE, SIPC, 200 Seaport Boulevard, Boston, MA 02110

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© 2015 FMR LLC. All rights reserved.

¹ Gender Gap in Financial Literacy, 2012
²Fidelity Investments, “Are Women Standing Up to the Retirement Savings Challenge?” 2013
³Fidelity Investments, “Empowering Women to Take Control of Their Retirement,” February 2015

Originally Posted at InsuranceNewsNet on February 12, 2015 by Business Wire.