Women Investors Pivot to More Proactive Approach in Financial Planning

Columbus, OH —The onset of the COVID-19 pandemic significantly impacted how women viewed their finances. While one might assume trepidation would be the prevailing sentiment after a tumultuous couple of years, the Nationwide Retirement Institute’s® Advisor Authority study found that women investors (with investable assets of $100,000 or more who are primary or shared decision-makers regarding long-term financial planning for themselves or their family) were significantly more optimistic about their financial outlook in 2021 compared to 2020 (49% vs 32%). With more experience living in the “new normal” created by the pandemic, women have become more proactive with their finances.

In fact, 72% of women investors have a strategy in place to protect themselves from outliving savings, 83% have a strategy in place to generate guaranteed income in retirement and 59% have a strategy in place to help protect assets against market risk. Additionally, due to experiencing firsthand how market volatility can significantly impact their portfolio, 68% of women investors will more conservatively revise their investing strategy, and 73% will revise their investing strategy to be more actively managed.

“Women investors are not taking their experiences living through the COVID-19 pandemic or other financial crises lightly,” said Ann Bair, SVP of Marketing for Nationwide Financial. “After experiencing the upheaval of these events, from market volatility to juggling childcare during remote learning, women are being more proactive in thinking about and planning for their futures.”

Taking Action, But Proceeding with Caution
About half of women investors indicated the Crash of 2008 (50%) and COVID-19 recession (48%) were two major financial crises that impacted how they approach finances and investments. Profound events such as these have led many women investors to start thinking further ahead about their financial futures, adjusting their approach to managing their personal finances by taking actions such as proactively starting a "rainy day" or emergency fund (23%) or establishing and following a budget (21%).

Women have already demonstrated a stronger likelihood than men to make better long-term decisions when facing financial crises. For example, fewer women investors (8%) than male investors (15%) liquidated assets from qualified retirement savings plans (e.g., 401(k), 403(b), 457, IRA) to cover financial obligations in response to crises that had a profound impact on them – a smart decision given the long-term consequences that can occur when pulling money out of your retirement savings.

Lessons learned from previous crises will help women face future events. With the COVID-19 recession still fresh in everyone’s minds, 16% of women expect to live through two additional financial crises in their lifetimes. These lessons may benefit women in the near-term—as 70% are concerned about a US economic recession in the next 12 months and 56% anticipate market volatility will increase over the next 12 months.

Women Investors Seek Solutions to Build Their Financial Confidence
Two-thirds of women investors work with an advisor (64%), and the main reason they do so is to feel more confident in their financial future (40%).

When women investors were asked what would make them more likely to work with, or influenced them to work with, an advisor or financial professional, an advisors’ experience (41%) was the most common factor. Ninety-two percent of those that currently work with an advisor or financial professional say that it helps them feel more confident they can make the right investment decisions, even during an extreme financial crisis.

“Women have distinct needs and perspectives that may be different from the traditional male client base that makes up the bulk of many financial services practices. When advisors recognize this and tailor their strategies to meet women where they are, they can build long-lasting, trusting relationships, and help their female clients achieve a more secure financial future,” said Lori Hall, Director of Strategic Accounts for Nationwide Financial. 

To help protect themselves from outliving their savings, women rely on solutions such as Social Security (64%), dividend yielding stocks (36%) and defined benefit plans/pensions (33%). However, financial professionals can help them branch out beyond those common solutions to find additional ways to meet their long-term needs in retirement, especially with the murky future of retirement income sources like Social Security and pensions.

“Advisors and financial professionals can help women understand what they can expect from strategies they currently have in place and think about other factors that may impact retirement income, including when they collect Social Security, health care costs, inflation, market volatility and taxes,” Hall said. “This can help identify gaps in their plan that may be addressed through new solutions.”

As it currently stands, two in five women investors (41%) are likely to choose an annuity to protect themselves against market risks as part of their holistic financial plans and about half of women investors (52%) are likely to choose an annuity to protect against outliving savings.

Nationwide created this resource to help advisors and financial professionals establish and build trusting relationships with female clients.

View an infographic for additional insights on this survey data.

Nationwide’s seventh annual Advisor Authority study powered by the Nationwide Retirement Institute® explores critical issues confronting advisors, financial professionals and individual investors—and the innovative techniques that they need to succeed in today’s complex market. This is the fourth in a series of ongoing releases from the seventh annual study.

About Advisor Authority: Methodology
The seventh annual Advisory Authority Survey was conducted online within the United States by The Harris Poll on behalf of Nationwide from July 22 – August 17, 2021 among 1,632 advisors and financial professionals and 839 investors, ages 18+. Among the 839 investors, there were 363 women, 475 men. Investors are weighted where necessary by age by gender, race/ethnicity, region, education, income, marital status, household size, investable assets and propensity to be online to bring them in line with their actual proportions in the population. Respondents for this survey were selected from among those who have agreed to participate in Harris Poll surveys. Because the sample is based on those who were invited to participate in Harris Poll online research, no estimates of theoretical sampling error can be calculated.

About The Harris Poll
The Harris Poll is one of the longest running surveys in the U.S. tracking public opinion, motivations and social sentiment since 1963 that is now part of Harris Insights & Analytics, a global consulting and market research firm that delivers social intelligence for transformational times. We work with clients in three primary areas: building twenty-first-century corporate reputation, crafting brand strategy and performance tracking, and earning organic media through public relations research. Our mission is to provide insights and advisory to help leaders make the best decisions possible. To learn more, please visit www.theharrispoll.com.