Women and Wealth: How Advisers Can Help Caregivers

PART I OF A THREE PART SERIES

To Attract Female Clients, Advisers Must be Attuned to Caregiver Role

As advisers look to grow their practice over the next decade, much will depend on their ability to attract female investors – a demographic that is poised to inherit $30 trillion in assets by 2030 and grow the wealth pool by another $5 trillion each year. But it will take more than marginal changes to support this important demographic.

As women approach and enter retirement, they experience wholly different life journeys and circumstances than their male counterparts that can disproportionately affect their journey to – and through – retirement. At some point in their lives, most women will experience widowhood, divorce, or find themselves caring for a parent or spouse. Many women will find themselves in more than one of those roles.

Understanding these journeys — and leaning into the needs that accompany them — will be critical to attracting and retaining female clients.

To help advisers better appreciate the needs of female clients during these life phases, Transamerica and InvestmentNews hosted a series of podcasts featuring advisers and other experts who specialize in supporting women through them.

The first episode focused on caregiving. It’s an experience that is far more likely to affect women than men. Sixty-two percent of family caregivers are women. And the costs can be overwhelming. Long-term care can range between $3,500-$7,500 per month, according to recent national averages compiled by the U.S. Department of Health and Human Services. These costs highlight the need women have for financial planning and advice from an adviser.

To clarify some of the challenges facing women during caregiving, the first episode featured Liz O’Donnell, whose website, Working Daughter, is dedicated to women balancing a career with caring for an aging parent. O’Donnell can speak to the demands of caregiving firsthand: Her parents were both diagnosed with terminal illnesses on the same day, and she was thrust into the caregiving role while balancing family and a demanding job.

Simply put, “eldercare doesn’t follow any schedule. It’s full of surprises,” O’Donnell told the audience.

Advisers could do more to help women along the way, she added. An early way to help would be brokering conversations between siblings about caring for their aging parent. Zoom and similar technologies make this easier than ever, O’Donnell said. But those conversations won’t always be easy.

Starting the Conversation

O’Donnell also touched on what advisers could do to start conversations between parents and their children about elder care, before someone is put into the caregiver role. To ease dialogue, it’s a matter of framing the topic.

“Part of the problem is it’s so often framed in terms of what’s going to be taken away from you … your youth, your home, your physical fitness, your health. It’s framed in the negative. If we can start to have these conversations earlier and frame them around opportunity, then I think we’ll all be more willing to jump into the conversation.”

As an example, adults can ask their parents what they want for their next phase in life. If the parent indicates a desire to stay in the house, for example, then ask what that will look like.

“Will you be willing to bring in a housekeeper or home health aid? Should we do some retrofitting for the bathroom so you won’t fall?,” O’Donnell explained. “You’re framing it around what they want, as opposed to saying something like ‘you know you can’t live here forever right?’ Of course, people will shut down when it’s posed that way.”

Establish An Eldercare Network

One of the biggest things advisers can do to help women thrust into the caregiving role is to vet and recommend other professionals the client may need. These include an eldercare attorney, potentially a career coach who can help if they have to exit and re-enter the workforce, and senior living consultants. The latter is one of the toughest to vet, O’Donnell said.

Senior living advisers are compensated in different ways. Some charge an upfront fee, others are compensated by the senior living center once they recommend it. That model could work if the senior living consultant has a wide network of places to recommend, but it could also be fraught with conflicts of interest.

She noted that the quality of the senior living advisor also varies. Some charge for a simple list of living centers you could find on Google, O’Donnell warned. She recommended the financial adviser do the due diligence on senior living advisors to find a good one. That due diligence should include a key question: What does the senior living advisor do to evaluate a facility?

“If the financial adviser can do the legwork and vet and can recommend senior living advisors that’s extremely valuable,” O’Donnell added.

More education on late-life strategies and their various costs would also help, O’Donnell said. She explained that for many people going through the caregiving role, they don’t need the adviser to solve everything, but to provide them options.

“It really comes down to scenario building and the what ifs … if [your] dad lives 10 years than X, if [your] dad lives 10 years than Y, if symptoms advance quickly than X.”

Many of O’Donnell’s tips for working with women who are caregivers – providing financial scenarios and options, building a support network of eldercare professionals, and brokering conversations between family members – share a common thread. They establish the adviser as a true partner in this phase of life, not someone who just works through financial numbers.

It’s a partnership that advisers would do well to nurture. Women are already an important wealth demographic. Greater longevity and higher career arcs for females mean they will become increasingly more influential to the wealth management industry. Further, they tend to refer new clients more than men, and their approval of an adviser can create inroads to establishing children as clients. Given their influence, stronger partnerships with women during life transitions such as caregiving could prove critical to sustaining an adviser’s business.