5 December 2013
In December 2012, the European Court of Justice imposed equality on insurance; meaning that men and women would have to pay the same for their insurance premiums. Fast forward nearly 12 months and the reality is that genuine income equality is still a long way off.
Many more women are taking responsibility as the main earner for their family – which could demand a shift in how advisers and providers recommend financial protection.
FACT 1: The number of households where women are the main earner has rocketed by 80% in the last 15 years; a third of UK couples now have a woman as the highest earner.
FACT 2: Only 29% of female breadwinner households have life insurance, compared to 40% of ‘male’ households.
FACT 3: 80% of all consumer decisions are made by women.
A recent Family Finances Report from Aviva reveals those households where the woman is the main earner have an income approximately £10,000 less than households where the main earner is a man. So how do advisers and providers tap into this new developing client segment and urge these families to consider how they might protect this income in case of the unexpected?
After all, women make up to 80% of all purchasing decisions for a family.
These women, especially those with a young family and a career will be very busy. Time is their premium, but they may also be vulnerable to debt and have an ability to save less. How can the industry understand the mind-set and key drivers for this segment? Solutions which have been suggested include;
There should be more female advisers
There is a perception issue; a recent poll of more than 2,000 consumers by the Financial Adviser School found that 60% of consumers thought that the typical financial adviser would be a man in his fifties, but a more concerning figure may be that just one in ten thought of a financial adviser being female. This was a view held equally by men and women. Lisa Winnard, Director of the Financial Adviser School said; ‘Women currently make up nearly a third of our applicants, and of our total intake, 58% are in their 20s’. The fact is that some women prefer to deal with women and others prefer to deal with men.
Do women evaluate risk differently to men?
It’s been suggested that women are less likely to save or to contribute to a pension. But does this necessarily mean that they are more likely to take risks? Or is it that they simply cannot afford to make provisions for their future? After all, women still earn 19% less than their male counterparts before bonuses are even considered.
Women tend to be put off by jargon, use plain English.
Is it really just female consumers who mentally switch off when confronted by technical financial jargon?
A survey by the Institute in Leadership and Management suggested that a quarter of the UK workforce is irritated by jargon. Simply leave out the jargon and three letter acronyms then surely everyone will be happier?
The importance of marital status
Single, married, divorced, living together, married again; even the term ‘Common-law wife’ suggests that there is a legally recognised status when in fact there isn’t. However, there are many realities which aren’t clearly identified by these definitions. For example;
1) The middle-class, university-educated woman, finally being paid what they deserve.
2) The undereducated, poorer single mothers who are financially struggling.
3) The mother who has taken multiple jobs now her husband is out of work.
At Space01, we think that the financial services industry needs to carefully consider the ways to reach these fast developing customer segments, and as usual we’ve a few areas for consideration…
– Could female-specific networking help advisers to reach professional women?
– If the financial services industry adopted ‘female single earner’ personas, would this help to shape effective communication strategies?
– Should providers do more to attract women to senior roles?
– Would low-cost simple products help to attract single earners?
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