by: Janet Kidd Stewart
October 25, 2012
Linda Adams, 65, owns a Solana Beach, Calif., training company where she has worked for 45 years.
Catherine Smith, 51, out of the workforce 22 years to raise a family, works as a day spa manager in Stillwater, Minn.
Their common link: Neither plans to retire anytime soon, but both are stepping a bit outside their financial comfort zones.
Adams is grappling with estate-planning moves that would mean giving up some control of her company, Gordon Training International, founded by her late husband, Thomas Gordon.
Smith, long devoted to certificates of deposit and ultraconservative mutual funds, has boosted her stock exposure as she restructures her retirement savings after a divorce.
Catering to female clients like Adams and Smith is big business for the financial services industry as it tries to capture more retirement assets.
“Women live longer and tend to move in and out of the workforce with more fluidity” than men, said Marissa Fox-Foley, executive vice president of marketing for LPL Financial, a large clearing and support services firm that serves financial advisers.
The company this year launched a major marketing push to educate advisers about winning and retaining female clients, particularly as clients hit major life transitions like divorce and retirement.
“In recent years women have started small businesses at a rate (of) two to three times their male counterparts. With their earning power and longevity, things are quite different from the retirement landscape of even five years ago,” Fox-Foley said.
Women and men want competent money management first, but many advisers fail to understand the relationship women often want with their advisers, said Candace Bahr, managing partner of the Bahr Investment Group in Carlsbad, Calif., and a registered LPL adviser. Bahr is also co-founder of the Women’s Institute for Financial Education (wife.org).
Adams hired Bahr as her financial adviser after asking for a recommendation from her tax adviser, a method Adams recommends to others. (Of course, it’s also important to check out a potential adviser’s background at finra.org, and talk with at least two or three candidates before making a selection).
“I had a potential client come in today who is 70. She got divorced at 50 and was telling me she’d been offered part of a retirement plan as part of the divorce but she had turned it down,” Bahr said. “Now she realizes what she gave up. Often women, when they’re divorcing, don’t realize the value of these retirement plans. They’re giving up substantial assets and they don’t recognize it until it’s too late.”
Complicating her situation, Smith said, was the fact she had never paid much attention to investments before her divorce and had to learn on the fly once she was on her own.
“Nicole (Middendorf, her adviser) told me she often recommends couples have a weekly date night where they talk about money, and I wished I had done that because if I had, I don’t think I would have been so afraid” of financial decisions, she said.
Middendorf is chief executive of Prosperwell Financial in Plymouth, Minn.
“So many women come into my office with an innate fear about money and becoming a bag lady,” she said. “I just try to get them to realize this is not an insurmountable problem.”
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