Data and Research March 13, 2018

Majority of Women Under 40 Do Not Have a Financial Adviser

Seventy percent of female financial advisers say women are underserved

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Seventy percent of female financial advisers say women investors are underserved as a broad demographic group, Edward Jones learned from a survey conducted during its third Annual Women’s Conference. This reinforces findings from the Center for Talent Innovations that discovered 75% of women under the age of 40 do not have a financial adviser. This amounts to $5 trillion in under-leveraged assets, Edward Jones says.

“With nearly 60% of wealth in the United States owned by women, amounting to over $11 trillion in assets, it is important that the financial services industry engages and deeply serves this critical group,” says Katherine Mauzy, principal of financial adviser talent acquisition at Edward Jones. “We are committed to understanding the specific concerns and challenges facing our female clients, which enables us to both attract and retain them.”

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Ninety-four percent of survey respondents said that leveraging existing client relationships through word of mouth is the strategy they use to attract new female clients. Fifty-five percent partner with other financial professionals, and 30% create women’s networking groups.

Nineteen percent said there have been no advancements in the past three to five years to ensure women receive equal opportunities in the financial services industry as men. Fifty-one percent said advancements have been made, but there is still much more work that needs to be done to attract women financial advisers.

Fifty-two percent said that if women were in top executive positions at financial services firms, that would attract more women to the industry. Edward Jones said this complements findings from a study by The Rockefeller Foundation that found 76% of women consider whether there are women in leadership positions when deciding where to work.

Twenty-three percent of those surveyed said it is important to offer internal networking and mentorship opportunities to attract and retain women to the industry, 17% pointed to generous maternity leave policies, and 8% said guaranteeing and enforcing equal pay for equal work.

“Although much work has been done in the financial services industry to level the playing field, there remains a gap in ensuring women are given the opportunities and tools they need to succeed,” says Monica Guiseffi, principal of financial adviser inclusion and diversity at Edward Jones.

Asked about the challenges for the financial services industry in 2018, survey respondents said new or impending regulations are the biggest challenge, although only 8% said they believe this is a concern of their clients. Rather, 50% said they believe their clients are most concerned about outliving their retirement savings, and 31% said they are worried about long-term care expenses.

The Edward Jones survey was conducted among 103 women advisers at the conference, held at the firm’s St. Louis headquarters in late February. Out of the firm’s 3,100 women advisers, only the top 250 qualified to attend the conference.

Data and Research March 13, 2018

Confusion About HSAs Remains Default Employee Position

A new survey shows many Americans are flatly unaware that they can use their health savings account assets accumulated in their working years to pay for health care and long-term care expenses in retirement—believing erroneously the money must be spent or be forfeited each year.

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A new joint report by the LIMRA Secure Retirement Institute and Insured Retirement Institute (IRI) finds only 51% of Americans believe they are knowledgeable about health savings accounts (HSAs).

And as is often the case in life, it seems that those people who feel confident in their knowledge on the subject actually have some trouble demonstrating their supposed prowess. As LIMRA SRI and IRI explain, the study surveyed consumers, financial advisers, asset managers, and employers to get a complete understanding of the HSA market and how this product is being used.

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“The survey results indicate there is much to be done to educate consumers, advisers and employers to ensure the full benefits of HSAs are realized,” researchers warn.

The survey shows many Americans are flatly unaware that they can use their HSA assets accumulated in their working years to pay for health care and long-term care expenses in retirement.

“In fact, two in five Americans mistakenly believe that balances must be spent by the end of the year, or be forfeited,” researchers warn. “The growing costs of health care and long-term care have prompted many advisers to address these risks with their clients as they plan for retirement. Nine in 10 advisers surveyed say they typically discuss healthcare or long-term care with clients, but only seven in 10 have specifically addressed the use of an HSA.”

Importantly, LIMRA SRI and IRI find those who do not discuss HSAs acknowledge they have insufficient expertise with HSAs. Nearly all advisers and employers surveyed say they would like to learn more.

“Today, only a quarter of Americans plan to use HSA assets to fund future health care costs in retirement,” says Judy Zaiken, corporate vice president and project director at the LIMRA Secure Retirement Institute. “The findings underscore a great opportunity for the industry to educate consumers and advisers on the value of using HSAs for tax-free asset growth and as a financial hedge against retirement health care costs, which is still an uncommon strategy.”

IRI President and CEO Cathy Weatherford adds that her organization “values the opportunity to collaborate with LIMRA Secure Retirement Institute to examine this growing aspect of holistic retirement planning.”

“As the onus of providing income during retirement is increasingly the responsibility of the individual, it is critical for the retirement income industry to drive consumer education on the value of participating in an HSA,” she argues. “While the need for more education is clear, it is encouraging to see the continued growth of HSAs over the past decade and the increasing number of employers offering and seeking avenues to offer these accounts in their benefit packages.”

As the researchers explain, the study found there were some groups of consumers that are more likely to be knowledgeable about HSAs than others. Wealthier households especially are more likely to be knowledgeable about HSAs. Among households with $100,000 or more in financial assets, 65% are knowledgeable, as compared to just 40% of those with less wealth.

Men are somewhat more likely than women to report being knowledgeable about HSAs (58% percent of men versus 48% of women are somewhat or very familiar). Similarly, married workers report more HSA knowledge than do non-married workers (69% versus 52%). Consumers with children report more HSA knowledge than those without children (55% versus 44%).

More LIMRA SRI information and research is available here.

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