Q&A: Women and Estate Planning

Financial services firms are missing out on at least $700 billion in revenue each year by not fully meeting women’s financial needs.

That figure comes from consulting firm Oliver Wyman, which cites finding new clients, developing new products and services and gaining increased market share as revenue opportunities.

Many firms, however, are missing out on this opportunity to grow and better serve their clients. Take estate planning, for example. Given women’s longer lifespans — about five years lengthier in the U.S. than they are for men — many couples’ wealth ultimately becomes the sole responsibility of the female spouse.

To learn more about the gender divide in estate planning and how advisors can better serve women in this area, we spoke with Gina Nelson, senior vice president and head of fiduciary services at Chilton Trust Company. Here are edited excerpts from that interview.

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Women have long advocated for greater inclusion in the financial industry, both on the professional and client sides. Why is it proving such a challenge for women to gain stronger representation in the industry?

I attended my first estate planning conference in 2002. It was the summer after my first year of law school, and I was working for an attorney who specialized in trusts and estates. I was awestruck by the 200 or so attorneys in the room, with years of estate planning experience, whose ranks I would soon be joining. It wasn’t until a few hours later, when the excitement started to wear off, that I realized that in that room of approximately 200 people, I could count the number of other women attendees on two hands.

In the nearly 20 years since I attended that conference, the number of women in the industry has certainly increased. But while the number of women working for trust companies has grown exponentially, the number of women estate planning attorneys seems to continue to lag.

While traditional gender roles continue to evolve, one of the issues that remains is representation. Women who are entering the workforce look for role models who not only hold positions they are interested in working toward, but who can also relate to their life experiences, which can be quite different for women, especially in the professional space. As more women attain prominent roles in these fields, more young women will see their potential to do the same.

[Read: How to Attract and Retain Women Investors]

How can we continue to drive inclusion for advisors and clients?

One of the best ways to drive inclusion is to proactively seek out women advisors. If the demand is created, eventually supply will catch up with that demand.

In my experience, I am seeing more and more women, particularly in younger generations, taking the reins of financial decisions and becoming more involved in financial discussions, even if they aren’t the actual decision-makers. It’s been a gradual change, but society continues to challenge traditional gender roles. Over time, we’ve naturally seen a move to more involvement by women on both sides of the table.

How are women’s financial needs different from men’s? Why is estate planning especially important for women?

Women, on average, will outlive men. Your basic estate plan in a “traditional” family situation sees the first spouse to die leaving the majority of his assets to the surviving spouse, generally the woman.

Therefore, it is typically the female’s estate plan that controls the ultimate disposition of wealth within, or outside, the family. But women may have had less involvement in financial decisions prior to the death of their spouse — at least historically. As that construct also continues to change with younger generations, giving women a solid foundation with which to make the final decisions around family wealth becomes all the more important.

[Read: Liz Ann Sonders — Stock Market Outlook for Q4 and 2021.]

Should advisors approach financial advice differently when working with women?

Shortly after I graduated from law school I decided to buy my first house. I was single, embarking on my first “grown-up” job, and excited at the prospect of becoming a homeowner. I met with a realtor who had been recommended to me by a friend. In our first meeting, after showing him a few homes I had found and explaining what I was looking for, he asked me whether my husband would be joining the meeting — a possibly benevolent enough question — to which I replied I was unmarried. I will never forget his response of, “I don’t think you should be looking at houses like these. Let me find you a nice condo instead.” Needless to say, I immediately found myself a new realtor.

That experience has led me to never make assumptions about someone’s goals based on any apparent norm. Metaphorically speaking, not every woman wants a nice condo, and not every man is looking for a house with an oversized garage. My goal in working with clients is to understand their needs, which of course vary from individual to individual and situation to situation. Every client, whether male, female or nonbinary, is looking for an advisor to get to know their unique objectives and adjust their approach and advice accordingly.

How is the estate planning process different for women?

Each client will be starting from a different level of understanding and working toward different goals. Some clients are driven largely by tax planning. Others are driven by goals of equity among children. And some are driven by charitable intentions. Some clients want to understand the technical aspects of their estate plan, while others don’t have any interest in the technicalities so long as their plan accomplishes their wishes.

These differences are rarely dictated by gender, so tailoring the process to each individual client is key.

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Q&A: Women and Estate Planning originally appeared on usnews.com

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