Business overview
Saturn Advice advisers provide impartial advice on a wide range of investments. We do not accept commissions and are free to act in the best interest of our clients.Products and services I offer
We are living longer, healthier lives and need to plan if we want to meet our life goals.I am responsible for the design and management of diversified investment portfolios for individuals and Family Trusts. I can also assist with retirement planning. How much income will you require throughout retirement and how much capital will you need to generate that level of income?
Why I'm in the Venus Network
I enjoy advising women and helping them through periods of intense change such as divorce or the loss of a partner.As a group we tend to earn less, save less, retire earlier and then live longer than men. I believe that awareness and good advice can help ease our way to a comfortable life. As the saying goes "a man is not a retirement plan".
My point of difference
I have empathy and I will listen as well as crunch the numbers.My latest business news
I wrote this article to help understand why women tend to be so conservative when investing - that's when they actually invest!“I like to keep my money where I can see it – hanging in my closet”
Carrie Bradshaw, Sex and the City.
We already know that factors including career choice and time out of the workforce can have a devastating impact on the retirement savings of women.
Another issue is that women are less likely to invest than men and when they do invest they are conservative, often preferring cash in the bank to shares. Unfortunately cash isn’t always king as tax and inflation erode the buying power of cash over time.
Research by Westpac found that women have lower sums in their KiwiSaver accounts and are less likely to have other investments, 39% compared to 52% of men.
So why don’t women invest when they are increasingly represented in well paid professional careers? For one thing investing is seen as a male dominated activity and the industry is not awash with female role models.
Women may be put off by the image of the testosterone fuelled broker on Wall Street and the culture of poor behaviour. Even the terminology can be off putting – an Aggressive portfolio sounds like something to be avoided in a dark alleyway.
Culturally, women may tilt more towards philanthropy and charity than the accumulation of wealth. They are conditioned to look good and dress well. In the world of glossy magazines a designer jacket or handbag is classed as an ‘investment piece’. Perhaps it is, but will a Prada clutch generate an income stream during your retirement years?
Being overly conservative amplifies the impact of lower lifetime earnings and saving. In New Zealand women tend to be clustered in the lower risk KiwiSaver funds while men are more likely to opt for Growth.
I see this in my practice as a financial adviser. When I speak to couples the woman invariably wants to invest more conservatively than her male partner. So why the conservatism?
A study by the German Institute for Economic Research (DIW) found that women would take more risk if they had more money to invest. As women find money harder to accrue they are less willing to put it at risk. This was backed up by a 2017 University of Missouri-Columbia study which found that income uncertainty was the main driver of risk aversion in women.
Women generally experience swings across their lifetime income. Typically they go from well-paid careers to child rearing to part time work, often passing up career opportunities to prioritise their own work/life balance and that of their family.
Women can also underestimate their own investment knowledge which adds to their risk aversion. When you believe investing is hard or complicated it is far easier to leave your money in the bank.
But women do have some things in their favour. Once they understand investment risk and volatility they adjust to it well.
‘Stash’, a US investing App, found that women were smarter investors than men and less likely to overreact to volatile markets. Although they self-identified as conservative investors they behaved very differently during periods of market volatility where men were 87% more likely to sell out, locking in their losses and missing the recovery rebound.
Women were more likely to ride out the volatility and there is plenty of research to show that ‘time in the market’ is a better strategy than ‘timing the market’. So although men are greater risk takers they have a tendency to over trade, missing market recoveries and paying higher transaction costs along the way.
Women have come a long way in a relatively short time. Perhaps their financial knowledge and behaviour needs more time to adapt. Maybe they don’t find investing very interesting.
Well here’s the thing, money increases your personal freedom and choice. You may be able to leave a job you dislike, retire early, travel more and ok, treat yourself to that statement jacket.
Jump in and the earlier the better. Talk to a financial adviser or research the options yourself. Female investment advisers do exist and there are more of us than you may think.
You don’t need a large lump sum to become an investor. Building a diversified portfolio with regular contributions can be a lower risk way to build your wealth. Along the way you will educate yourself about investing and markets.
Optimise your KiwiSaver but realise it is not liquid. You cannot access your money until you turn 65. A separate standalone portfolio can be tapped for unforeseen expenses if necessary but ideally left to accumulate alongside KiwiSaver.
Becoming financially secure is an important part of your own self- care. With increasing health and wellness plus those resilient XX chromosomes we are likely to be retired for a very long time. By learning where and how best to invest, you are on track to make those years fulfilling and comfortable.
Jean Strock July 2019
The information provided is of a general nature and is not intended to be personalised financial advice.
