Men, women & money: What we can learn from each other

In 1993, an American author and relationship counselor named John Gray published his soon-to-be classic “Men Are from Mars, Women Are from Venus.” The book explored the differences between men and women when it comes to relationships and became one of the bestselling nonfiction titles of the 1990s. As a financial adviser, I’ve seen the differences between men and women play out in my offices, but that’s not to say that such differences are bad.
In fact, I think men and women have a quite a bit to learn from one another — if only we as financial advisers make the time and effort to help them realize it.
The differences men and women have regarding investing begin with their own individual priorities. A 2009 study by Greenwald & Associates found that when ranking priorities such as quality family time, being a good parent, having work/life balance and being financially prepared, women rank quality family time and being a good parent more than twice as important as being financially prepared. Men, on the other hand, weigh their responses much more evenly among these priorities, probably due to the fact that men feel an onus to be solid financial providers from the get-go.
(More: Retirement savings gap between sexes narrows, but women still lag)
I’ve noticed that men speak up earlier and more often and are more apt to take an aggressive approach to investing that draws upon a diverse mix of assets, including stocks, bonds, master limited partnerships and real estate investment trusts, and perhaps even private equity. Women, at times, misunderstand the notion of risk, with some thinking that keeping a majority of their money in bonds, CDs and annuities will shield them from volatility in the equity markets — something we’ve all seen quite a bit of lately.
Of course we all know the risks of having too many safe havens in one’s portfolio. With bonds, CDs and other fixed-income investments paying such low yields, investors run the risk of failing to meet their long-term goals to enjoy a secure retirement. And while reconciling these two schools of thought might seem challenging, financial advisers are in a unique position to help their clients achieve their investing goals and can do so by following these three steps:

1. Accept that men and women are different One of John Gray’s key findings in “Men Are From Mars, Women Are from Venus” is that men are more apt to want to solve problems, whereas women want to discuss them. Both archetypes can be put to work in investing, as it’s equally important to hunt for the best investment opportunities while also keeping a consistent line of communication open.
2. Help clients balance risk and reward It’s true that men are more inclined to take risks while women sometimes misunderstand the notion of safety. Recent market volatility might present a buying opportunity in men’s eyes while women might wish to focus on so-called safe havens such as bonds, CDs and Treasuries. Both parties are right — and in a way, wrong! One should avoid trying to time the market and avoid investing in fixed-income assets exclusively. Both run the risk of disrupting long-term investing goals.
3. Keep the lines of communication open Women sometimes are more likely to seek out advice than men, but at the same time, are less likely to speak up during actual meetings with their adviser. The solution is to encourage an open line of communication with both clients during all meetings, and encourage them to speak to one another as well. This will help both sides feel satisfied and knowing they are actively contributing to their financial futures.
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While much has been made about the so-called battle of the sexes, men and women both want the same thing: financial security to provide for themselves and their loved ones. As women continue to gain more spending power and inch closer to equal financial footing with men, their voices are heard more often than ever before. Financial advisers are in a unique position to help couples recognize their respective differences and that neither investment philosophy is bad. By balancing risk and reward, keeping the lines of communication open and realizing that they share the same goals, advisers of both genders can help their clients build the life they’ve always dreamed of.

Gayle Reed is senior vice president and financial adviser at D.A. Davidson & Co.