NEW YORK — Women face greater challenges achieving financial security than men and must therefore plan carefully and act diligently in order to ensure their finances remain healthy, according to a panel discussion at the Business Insurance Women to Watch Leadership Workshop in New York on Tuesday.
The group discussing “Achieving Financial Independence” included investment advisers as well as risk management and recruiting professionals.
The battle begins with wage disparity, according to Karin Landry, managing partner with Spring Consulting Group L.L.C. While women on average earn only 82 cents for every dollar earned by a man, that gap widens substantially in the insurance and financial services industry, dropping to 62 cents on the dollar.
Asked when women should start saving and planning for their financial futures, Jennifer Lee, regional managing director of the New York region for Wells Fargo & Co., answered, “From the day you get your first job.”
“Women really can't afford not to do this as they go forward,” Ms. Lee said.
Her thoughts were echoed by John Sweeney, executive vice president, retirement and investing strategies, for Personal Investment, a unit of Fidelity Investments. “If they say, 'I can't afford to save that much,' I reply, 'You can't afford not to.'”
Mr. Sweeney recommended that everyone put aside 15% of their salary into a 401(k) investment program.
Build investing confidence
Confidence plays a role in financial planning, something that women seem to approach with greater anxiety than men. Ms. Lee said that even some affluent women are not comfortable with investing.
“For your own financial security, you need to have the confidence,” said Ms. Lee.
Mr. Sweeney also said that men appear to be more confident, although not always superior, investors.
“Men have more confidence. That doesn't mean they make better decisions,” said Mr. Sweeney.
Be aware of compensation options
Successful negotiations are also crucial to financial security, and part of this is being aware of all potential means of compensation, according to Margaret Resce Milkint, managing partner with Chicago-based Jacobson Group, where she leads the firm's U.S. executive search operation. “When you are starting out, you are concerned with base salary. As you ascend, you must take a more comprehensive look,” said Ms. Milkint.
She strongly recommended taking advantage of whatever long-term incentives an employer might offer. “The earlier you can get into long-term incentives, the better off you'll be,” said Ms. Milkint.
Something that could help foster the type of professional development and success that leads to financial independence is having a sponsor within one's company, said Ms. Landry.
But many women in the insurance industry end up with male sponsors due to the shortage of senior female professionals throughout insurance ranks.
“You almost have to have a male sponsor because there are not enough women in the industry,” said Debbie Rodgers, senior vice president, global risk management with Philadelphia-based Aramark Corp.