The CFO Is In


Why becoming cheif of your own finances is crucial.

There I was as a child, doing exactly what my father had told me to do, handing my hard-earned babysitting money over to the bank teller. She duly noted the deposit in my little passbook, yet I left the bank without the warm, fuzzy feeling my father promised I’d get as a result of saving money. That came later. Much later.

I suspect my childhood disinterest in savings isn’t gender specific. But as adults, women frequently find themselves behind their male counterparts when it comes to financial planning. And government sources provide astounding statistics on the subject of women and money:

70 - percentage of all elderly who are women
59 - average age of widowhood
55 - percentage of women who now believe they’ll have to work longer than they expected
- years women outlive men

Pretty sobering. But take heart, three local financial experts agree it’s never too late to become an effective chief financial officer (CFO) in your own household.

Recent figures show 95 percent of all women are involved in purchasing decisions, and 53 percent are the main source of their family’s income. But only a third of women surveyed by Prudential Research have a detailed financial plan. Why?

Citibank Illinois Retail President Mindy Mercaldo says her female clients are juggling work, parenting, caring for aging parents and more. Financial decisions are a low priority. “Then an event happens – a divorce, death, loss of a job – and financial planning moves to the top of the list. A crisis is not a good time to make such important decisions,” she observes.

Morgan Stanley Wealth Management First Vice President/Chicago Wealth Advisor Gwen Cohen agrees, saying women overwhelmingly put others first, even if it means neglecting important issues like their financial health. “My great-grandmother said that financial success depends on preparedness,” she explains. “No one should have to be in mourning and in the dark at the same time.”

Even though she frequently hears women say, “I’m not good with numbers,” Ms. Cohen tells her female clients they should never be in a position where they must step into the shoes of someone else’s financial decisions uninformed. Even though a loved one might insist that everything “has been taken care of,” a woman needs to understand the implications of that phrase.

Putting marketing slogans in swirly, feminine fonts will neither entice women to plan, nor bring them to the doors of banks or other financial experts. So what will? Eileen Trost, a partner in estate planning at Chicago’sFreeborn and Peters, LLP, says communication is key. “Women look for someone they think gets their issues – whatever they are. They want someone who will listen to them.”

Ms. Cohen sees it, too: “Women should identify specific criteria for what’s important to them. They have to be comfortable with an advisor, have a chemistry. It must be someone who will help them develop a plan and then help them monitor it.”

Does the gender of the financial provider matter? Ms. Mercaldo doesn’t think so. The key is trust. “Women are more relationship-oriented and therefore value personalized attention,” she observes. “Men like report talk: give them facts, figures and headlines. Women don’t want to talk about a single transaction. They want a holistic approach to financial planning.”

Identifying goals and styles is crucial to any relationship. And when it comes to money, women have very distinct characteristics. “Women are tactical and transactional,” Ms. Mercaldo says. “They’re not risk avoiders; they’re risk thinkers, willing to take a risk but wanting to understand it in the context of their goals. Women are savvy investment decision makers. Just look at investment clubs – all-female clubs have long outperformed all-male clubs.”

Ms. Trost points to a contrast in the perception of money: “To men, money is business. To women, money is family; everything is family.” Consequently, she perceives that women tend to care more about the details of their estate plans and how they will impact them and their families. Her female clients also tend to ask more questions than men do.

Mathematically speaking, a person has a one in 5,000 chance of being involved in an airline accident. Yet, every flight begins with the flight attendants’ safety presentation. Financially speaking, all three experts agree that planning is the number one thing women can do keep themselves financially safe. They must educate themselves and never feel ashamed or be discouraged when it comes to asking questions. Accomplish those things and the title of CFO is just around the corner.


About Judy Pearson

Judy Pearson is a graduate of Michigan State University who's written nearly two decades worth of newspaper and magazine articles and has published three books. Her biography of Virginia Hall, Wolves at the Door: the True Story of America’s Greatest Female Spy, has been optioned for a movie. Her most recent book, It’s Just Hair: 20 Essential Life Lessons, is a 2012 International Book Award finalist. Ms. Pearson is also the founder of Courage Concepts, an organization that cultivates courage in women and provides workshops/keynotes for corporations and other organizations.