When it comes to managing money long-term, wealthy women are opting out of responsibility and deferring to their male partners.
Investment bank UBS polled 3,700 married women, widows, and divorcees across nine countries. All the interviewees were classified as high-net-worth individuals. The survey found that while the women were very likely to take an active role in day-to-day money management, they were much less likely to have responsibility for longterm financial planning tools like savings, investments, pension management, and insurance.
In total, 85% of the women said they managed day-to-day expenses. But only 23% said they took the lead on longterm planning, while 19% said longterm responsibilities were equally shared. The other 58% said they deferred longterm planning to their spouses. The reasons given ranged from a belief that their partner knew more about the topic, to active discouragement from their spouse to take an interest.
Perhaps most surprisingly of all, younger women were somewhat more likely than older women to defer decisions to their spouse. In the 20-34 age group and the 35-50 group, 59% of women said they deferred to their partners. Among women over 50, only 55% said they let their husbands take the lead.
The tendency of younger women to perpetuate the status quo could paradoxically stem from a sense of equality being greater than ever before, said Shona Baijal, managing director at UBS Wealth Management in London.
“I’m wondering whether part of this is to do with how millennial woman have been brought up…I think they probably see themselves as even more gender-neutral than our generation,” Baijal said. She noted that the bank struggles, with both male and female millennial clients, to impress on them the importance of thinking longterm. With women specifically, Baijal said, “they don’t see themselves as necessarily going to have a gender pay gap, they don’t as yet fully grasp the impact that maternity leave or flexible working is going to have. … They don’t, for different reasons [than previous generations], understand the impact of not being involved in that decision-making process when they do get married, and obviously have started to defer to [their spouse].”
What’s the fix? UBS suggests that, for starters, committed couples arrange a “financial date night” to discuss their financial goals. (The right time doesn’t have to be limited to just before or after marriage; when couples have kids is also a great moment to think seriously about how to arrange the family finances.)
“We are saying, start with, as a couple, having that conversation,” Baijal said. “Have a ‘financial date night.’” During the date—and though it might not sound like much fun—it’s important to lay everything on the table: to talk openly about what assets you have, what longterm investment or savings plans are already in place, and what you want out of them for your later life and retirement.
Right now “the woman takes the day-to-day, and the man takes the long-term. That’s the default…Even if the man ends up taking responsibility for driving that forward, having had the conversation means the man can be more cognizant and aware, and plan for the woman as much as for himself,” Baijal said. Based on the research, “that foundation is not rock solid right now.”
Everyone will do things differently. But as a starting point to get the conversation flowing, Baijal suggests thinking about the “three Ls”: liquidity, longevity, and legacy. It might not make for a romantic evening, but it just might help set you up for longterm relationship happiness.