The Heller School for Social Policy and Management, Brandeis University

National Program on Women & Aging

Women & Aging Letter
Excerpt - August 1998
 

500 Women Speak Out: Financial Plans and "Financial Planners"
Volume 3, Number 2

This issue of the Letter presents findings from the National Center on Women & Aging's recent survey of women and financial planning . The major focus of that survey was to learn how women felt they were being served by the many types of people calling themselves "financial planners."  The Center interviewed 500 women across the country by telephone, conducting in-depth interviews. The women were encouraged to speak freely and at length about their experiences, hopes, and fears.   To follow are some of the findings.
Finding a Financial Planner

In the July 1997 issue of the Letter "Financial Planning: Finding Someone You Can Trust",  we discussed the following key steps:

  • Interview more than one financial adviser.
  • Prepare questions and some sort of  personal "financial statement" before the interviews.
  • Assess a planner's prior work by looking at copies of plans s/he has previously prepared. And talk to some prior clients.
  • "Investigate" the planner by checking with credentialing and regulatory organizations.
  • Be clear about how the planner will be paid and what the assistance will cost you.


    • When we asked women in the Center survey about how they chose their planner, we found that very few undertook any of the above steps. While finding a professional planner one can trust was a big concern for most of the women, many did not know how to go about finding one. Half simply relied on the recommendation of a relative or friend without reviewing past performance. Only nine percent did any specific background checking regarding possible violations of the securities laws. Furthermore, almost none specifically investigated a planner's experience, qualifications, or record of service! And a shocking 43 percent said that they had not discussed compensation of the planner before the work began.  This is not the financial planning behavior we recommend our readers follow! Yet we do recommend that most women get help from a good planner.
     

    It Takes Time, Not Math

    Most women felt they had "prepared for retirement," but some did not. Why? In general, many people avoid financial planning because they do not like or are not good at math. But as nationally syndicated columnist Jane Bryant Quinn said at the Center's May Financial Planning Conference in Washington, "Investing is not about math." It's about concepts, and women can understand them just as easily as men. Quinn emphasized that the two most important financial concepts are not at all difficult to understand or follow: (1) diversifying investments to spread risk and (2) investing continuously over a long period of time, not trying to second guess market movements by shifting money in and out.

    Financial planning does take some time, however. One must keep financial records in order. It is also important to spend time learning the basic facts about financial investingóby reading recommended publications, attending seminars and lectures, or exploring the many learning tools now available on the Internet and in computer software packages.

    Knowing the basics will help you do a better job of choosing professionals to give you more specialized and more sophisticated advice. But finding someone you can trust will also take some time if you want to do it properly (and minimize the possibility of putting your money in the hands of an incompetent or a scam artist). Finally, once you get assistance, do not think your job is over. You must take the time to stay involved in your finances, monitoring and evaluating the advice and help you are receiving.
     

    Just Do It!

    Research over the years on financial planning indicates one big distinction among people approaching retirement: the people who "do something" are generally better off. Of course, the end result depends on when you start, how much you save, how you save it, and whether you avoid the clutches of those out to defraud you. It also depends very much on avoiding the financial pitfalls that arise when shifting from being part of a couple to being on your own (as a result of separation, divorce, or the death of a spouse).

    But as Deborah Chalfie states in a recent AARP publication on "Saving for Retirement",  "it's better to get started and then adjust your strategies with experience than to procrastinate until you find the 'perfect' investment plan.... At age 40, a one-year delay in saving $50 a week will cost you more than $18,000 in retirement. Procrastinating is the biggest investment mistake you can make."
     

    This is an excerpt only

    Back to Women & Aging Letter page

    Back to Home Page