You’re Not Supposed to Talk About This (But We Want You To) | Allworth Financial

As early as our childhood, we’re discouraged from talking about money.

“Mom, how much do you make?” “That’s rude. Don’t ask.”

“Dad, how much did our vacation cost?” “That’s rude. Don’t ask.”

“Hey, Billy. How much did your brother pay for his car?” “That’s rude. Don’t ask.”

Sound familiar? If we’re constantly told to never ask questions about money, is it any surprise how many people have trouble managing it as they get older? 

For women especially, the idea of discussing money seems to be extremely taboo: 61% would rather talk about their own death.^[i]

But instituting a complete blackout of all money conversations – either due to embarrassment, intimidation, or the urge to uphold social norms – can do more harm than good. If you don’t talk about money (or investing, or retirement), how can you expect to learn? To grow? To gauge how your own situation is faring? To know what to ask a financial advisor?

With a crisis in retirement preparation, it’s time for a new approach. It’s time to start opening up and having frank discussions about money.

Yes, we want you to shatter the taboo.

Open Up

Don’t understand money, investing, or how to go about saving more for retirement? It’s normal to be worried about looking foolish.

What’s tragic is paying for your silence later because you were afraid to ask hard questions. 

Talk with your family, your friends. Talk about your mistakes. Talk about your goals. Ask those questions you think are too silly to ask (we promise you, they’re not too silly).

As you share, you’ll hopefully learn as well. Your financial confidence will increase. And this is key, particularly for women: on average, women retire with two-thirds of the amount of savings and investments that men retire with – and they generally live longer than men – so a lack of financial confidence can become a very serious problem.^[ii]

How can you get started? The next time you’re with a group of trusted friends, take the initiative. And this doesn’t mean asking how much everyone makes. Instead, consider questions such as:

• Are you saving enough to get your 401(k) match?
• Does your work offer a Roth 401(k)?
• Has anyone opened a Roth IRA?
• Does anyone have tips for helping the kids pay for college?
• Is there a money stressor you’re worried about right now?
• What’s everyone’s dream for retirement?

The only way you’re going to feel empowered enough to make financial decisions for yourself down the line is if you’re educated – or, at the very least, comfortable enough to ask the not-so-comfortable questions.

Working With An Advisor

Having a strong sense of financial confidence extends beyond yourself as well; it will also help determine if a financial advisor is treating you fairly.

First, there’s ‘fairness’ as it relates to the advisor’s responsibilities to you, their client. You need to have the confidence to ask the right questions when selecting an advisor. These include:

• Are you a fiduciary who’s legally obligated to always work in my best interest?
• What are your credentials?
• Do you think there are differences in the way men and women should prepare for retirement?
• Are you registered with the Securities and Exchange Commission?
• How are you paid?
• How often will I hear from you and meet with you?

If you don’t understand something, ask again. If the advisor sidesteps a question, ask again. Stick to your guns.

Second, there’s ‘fairness’ as in ‘equality.’ But unfortunately, 44% of women who are their household’s main income earner generally feel as though financial advisors treat women differently than men.

Why does this happen? It’s likely a combination of a financial advisor buying into gendered stereotypes and the fact that women only comprise 16% of the financial services industry.^[iii]

Additionally, consider this: 31% of newly-single women (either due to separation, divorce, or death of a spouse) who work with a financial advisor feel they are patronized. Among this group, half are considering finding another advisor.^[iv]

If you’re a woman reading this, you know you deserve better than an advisor with whom you don’t feel 100% comfortable. If you’re married to a woman and working with an advisor, ask her what she truly thinks of that advisor.

The good news? There are a few ways to ‘vet’ an advisor for gender bias:

• Does the advisor (or firm) have a standard planning process for all clients, regardless of gender?
• If you’re meeting the advisor with your spouse or partner, does the advisor address both of you equally?
• At the firm, are there female advisors and mangers?
• Pick a financial topic and asked for it to be explained. Take note of tone and body language.

Learning how to make smart financial decisions isn’t going to happen magically. But becoming comfortable talking about money, as well as learning how to find an advisor who understands your specific situation, is one small step in the right direction.

 

 

[i] https://money.usnews.com/investing/investing-101/articles/infographic-investing-barriers-women-face

[ii] https://blog.prosper.com/2017/10/06/talking-money-with-your-girlfriends/

[iii] https://www.thinkadvisor.com/2017/01/18/only-16-of-advisors-are-women-cerulli/?slreturn=20190623094235

[iv] https://www.planadviser.com/many-widows-divorcees-feel-patronized-financial-advisers/