Why Working Women Need A Financial Adviser

By Saroni Chakravarti | June 24, 2018

As a financially independent woman, there’s so much more that you can do with your money than simply using it to pay your bills. Here’s how a financial adviser can help you do just that.  

Why Working Women Need A Financial Adviser

Movements like #metoo exposed the blatant sexism and discrimination that women still face across industries and professions. These developments are a sign that women today are no longer afraid of claiming their rightful place under the sun. For instance, Saudi Arabia recently lifted the ban that prohibits women from driving. According to a Bloomberg Economics report, the move could add as much as $90B to economic output by 2030 as this will bring more women into the work fold. With this directive, Saudi Arabia ended its status as the last country in the world that prohibits women from driving. Today, if you look around, you’ll find women helming organisations, leading breakthrough innovations, conquering the world’s tallest mountain peaks and acing the game of multi-tasking as home-makers.

Increasingly, women have been foraying into territories that were unheard of and leaving their mark there. However, when it comes to managing their personal finances, most women are still relying on a financial approach that can be best described as ‘medieval’. With expense streams diversifying and cash inflow limited, women need to come up with novel ways to manage their money better. Ideally, women should think single when it comes to money. Women outlive men on an average of at least 5 years. Having a solid corpus in place will help them become effective stewards of their financial destinies.

As women grow into evolving roles, both in the workforce and at home, taking the right measures where saving and investing are concerned is essential. Here are the most compulsive reasons why women should be willing to consider hiring a financial advisor:

Women have different life expectancies:

Life expectancies may be on the rise for everyone, but statistically, women are more likely to outlive their male counterparts. Longevity is one of the most important possibilities that women need to factor in while drawing up their financial roadmap.

As mentioned above, women have a tendency to gravitate towards more traditional forms of investment like PPF, KVP, NSC and FDs. However, they should accord equal importance to equity-linked investments like Mutual Funds. These will not only help save taxes but also trump other investment options in terms of returns, lock-in period (shortest lock-in period of three years) and tax-treatment of gains.

However, investing in Mutual Funds calls for an assessment of your financial goals first. A financial planner can help you create the right portfolio of your investments based on those goals.

Additional Reading: 3 Tips For Young Women To Manage Their Finances Smartly

Women will have more mid-career breaks:

Caring for a child, ageing parent or ill spouse is a situation that women will probably have to grapple with at some point in their lives. Carrying out these duties alongside a full-time job is a real challenge. Most have to give up their jobs to be able to take on these roles. These situations have potential financial implications that are often ignored while building a financial corpus. A financial adviser can help you plan for a retirement corpus that is not depleted of its financial resources owing to long-term caregiving for an ill spouse or ageing parent.

Additional Reading: How Women Can Save For Career Breaks

Women are wired differently:

Women and men are poles apart when it comes to their risk appetite for investments. Most women often make the mistake of being too conservative in their portfolios and choice of investments. Expert guidance from a financial adviser can help women increase their investment appetite and build their financial confidence.

Additional Reading: 5 Ways That Can Help Women Create Wealth

The pay gap exists. Still.

The gender gap has far-reaching consequences that extend beyond a woman’s career advancement. It even determines her financial stability in terms of eligibility for Credit Cards and Personal Loans as well as her ability to save for the future through Mutual Funds or Fixed Deposits.

Your retirement income will be based upon the accumulation of your lifetime savings. This means that the pay gap will result in a substantial retirement wage gap. Many women including those who are homemakers hold off saving for their retirement until they reach their 40s. A financial planner can help a financially independent woman to start investing for her retirement corpus right from the start of her career. That way despite career breaks or the pay gap, her investments will get more time to grow and benefit from the power of compounding.

Additional Reading: Why Women Shouldn’t Shy Away From Negotiating Their Salary

While considering a financial planner, one consideration that should take priority over all else is his/her educational qualification. Professional financial planners usually have a CFP (Certified Financial Planner) degree that the Financial Planning Standards Board of India awards. Women should look for an advisor who’s easy to talk to and is willing to listen.

The financial planner should be able to suggest financial strategies and investment options that are specific to one’s situation. A financial planner can help you in areas like tax planning, setting up streams of alternate income, building a corpus for the future etc. Hiring a financial adviser can be an expensive proposition. But it can work out to be an investment when viewed in the larger scheme of your financial future.

Want to kick-start your financial planning already? Why not give BankBazaar a shot?

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Category: Financial Planning Money Management Women
Saroni Chakravarti

About Saroni Chakravarti

Saroni loves all things quaint and old world- be it art, music or cinema. She has a special knack for spotting the weirdest traits in people and can't for the life of her understand why she attracts the worst co-passengers. Despite her cynical exterior, she still hopes for a world that will be free from discrimination and cruelty. When she's not spending her day commuting, she can be found watching funny videos, reading, and sending out needy vibes to strays around her.

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