In recent years, there’s been a lot of publicity around sexual harassment, and the MeToo movement seems to have brought us to a new age for women and their ability to exercise their legal rights, especially as it pertains to the work environment. But it is worth noting just how discriminatory our society, and others, have been toward women even in fairly recent times. The evolution of women’s rights however, particularly in terms of financial equality, is remarkable and eye-opening.
Here are some legal mile markers for women you may be surprised to learn. Until 1839, no state allowed women to own property in their own names. Before the 1974 Equal Credit Opportunity Act, banks routinely required single, widowed, or divorced women to bring a man along to cosign any credit application they made. In fact, a client recently shared with me that when she and her husband applied for a mortgage, the bank only considered half of her reported income. Until 1981, husbands were legally permitted to keep their wives in the dark about their family finances and were allowed to unilaterally take out second mortgages on property owned jointly with their wives. And lastly, until the 2009 passage of the Lilly Ledbetter Fair Pay Restoration Act, women were not able to sue for the differences in discriminatory pay between their income and comparable men’s income if more than six months had passed. Now, I realize women have only had the right to vote since 1920 but clearly it took an awful long time to gain some financial equality. Heck, we still haven’t ratified the Equal Rights Amendment which passed in Congress back in 1972! We need one more state to ratify the amendment in order to get the 75% state approval but that hasn’t stopped women from moving forward and creating a path to success for their daughters.
Where we are today
It’s hard to fathom that some of these barriers ever existed considering where we are now. Currently, women are earning 57% of all bachelor’s degrees, make up 47% of the US workforce, and control 51% of personal wealth in the U.S. But, with more power and more opportunity, comes an even bigger need and responsibility for women to be well-informed, agile, and forward thinking.
How financial advisors can provide value beyond your portfolio
With the increased number of women in charge of their own finances, it is a great opportunity for financial advisors to provide support in ways people may not expect from the person or team they hire to manage their wealth. Here are some areas in which your advisor can help you beyond investments:
- Financial literacy
Getting a better understanding about money takes work, but it doesn’t have to be overwhelming. With the right attitude and education, women can feel empowered and confident about their financial future. In addition to general financial education, there are constantly new issues that arise which may affect a person’s wealth and future planning. An advisor can regularly keep you informed of these and evaluate if it impacts you.
For example, with ever-changing laws, it is important for people to stay on top of financial current events. Two recent examples are in the 2018 Tax Act affecting alimony payments and new deductions for business owners. Essentially, for new divorce agreements, the alimony payment is no longer considered income to the recipient and therefore, no longer tax-deductible to the payor. For business owners, no matter how small, they may be eligible to receive a new 20% deduction on their business income. In some cases, this may change how you file your taxes with your spouse as their income may reduce the eligibility of the business owner spouse.
- Stress relief and peace of mind
A financial advisor can be very valuable during tumultuous times, not just to help understand your accounts but also to have some emotional support. At Kendall Capital, we do this in various ways:
- Guide newly widowed or divorced clients through the daunting realization that their future is not how they pictured it would be. With our help, they don’t have to do it alone.
- Take the time to thoroughly explain how their accounts work and describe the roles or responsibilities the client may have. This is especially important as an elderly parent gradually needs help from a child or trustee.
- Share ideas, strategies, and offer recommendations during transitional periods. Sometimes these major changes lead to opportunities which weren’t previously available.
- Introduce clients to other professionals like accountants and estate attorneys to build them a new team who looks out for their best interests.
- Build community
It is common for women to seek community. With more and more women in charge of their own finances, many alone as they age or as circumstances change, it is important for them to find this community or their “village.” A financial advisor can introduce a client to other clients who are in similar situations, or simply share wisdom or their own experiences which may be comforting. It is always helpful and important to connect with others who have been in your boat.
- Reassess and inspire
When our clients are faced with life changes or challenges, we help them reassess their future and form a new dream of what it may look like. We encourage clients to embrace this new chapter in life and feel they are now more in control of their financial future. For example, one client comes to mind who was in the process of finalizing her divorce. She was a successful professional who was ready to enjoy the money she worked so hard to earn and save, but wanted our guidance since her husband had previously handled their finances. Some of her goals were to donate to charities and travel to Europe, things her ex-husband wouldn’t do. She also lamented that it was so hard to get her kids all together and thought it would be nice if she could organize a vacation for them all. It took a little time, but with our encouragement we helped her understand she really could afford to do those things and enjoy her retirement in a few years. Now, she is finally able to feel that all of her hard work has paid off and cherishes the quality time with her kids.
Male or female, young or old, life is full of changes and financial decisions. Kendall Capital has the experience to help guide clients through tough times.