for RICHER & for POORER

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Among married households, women's financial prowess is on the rise. Are marketers ready?

Sherilynn Lerner and Mike Jones have shared a lot together in the 13 years they've been married: a life, a house, a son. But there's still one thing the couple from Hunterdon County, New Jersey keeps separate. The dual-income lawyers maintain three different bank accounts: his, hers, and ours. And, Lerner is in charge of them all, even her husband's private account. "I keep my own account for my security," she says. "Our joint account is for the day-to-day bills. And Mike's account is to teach him how to manage money, which after 13 years he still hasn't mastered. I'm compulsive about paying our bills, and I don't want anything to destroy our credit. Plus, I certainly didn't want to be one of those women who didn't even know what a checkbook was."

Those women - whose connection to finance is limited to clipping coupons and paying the milkman - are becoming as scarce as, well, milkmen. The female half, once limited to such weighty matters as grocery spending, is now an equal partner in long-term financial decisions such as mortgages, investments, and estate planning. Today, women have an equal financial say in 75 percent of all U.S. households. It is a transformation that has occurred gradually in the home, against the backdrop of a much larger cultural debate about the workplace and glass ceilings. Yet, this shift is just as consequential, especially for marketers with an eye toward married consumers. As the role of women in society continues to widen, this issue is sure to transform the marketing landscape. "It's a real paradigm shift," says Don Taylor, president of FISI Madison Financial, a bank consulting firm in Nashville, Tennessee. "Thanks to an increase in dual-income households, women are more financially savvy customers today."

Women also have greater buying power. For those targeting tomorrow's couples, the message is clear: Ignore the female half at your own peril. A 1999 SRI Consulting survey, which polled 3,800 households, revealed that four in 10 homes are managed by women. Men, meanwhile, were solely responsible for financial decisions in less than 30 percent of all households. Moreover, a 1996 General Social Survey conducted every other year by the National Opinion Research Center at the University of Chicago, found a role reversal of sorts: the wife manages all the money for 28 percent of married couples (except for the husband's personal spending money). Another 37 percent of couples pool their money, giving the women at least some say. "Most married couples today aren't using Ozzie and Harriet as their role models," says Larry Cohen, director of SRI Consulting's Consumer Financial Decisions Group, in Princeton, New Jersey.

The shift inside the home reflects the rising power of women within society in general. Over the last half-century, the number of women in the workplace has tripled. As a result, the real median income of married-couple families increased by a whopping 150 percent, according to the US Census Bureau. Between 1970 and 1998, median incomes for women increased by 63 percent, but decreased by 6 percent for men. That's largely because many men work in manufacturing jobs, a sector that has seen its numbers dwindle. Women, meanwhile, began to work in greater numbers during the same time period, and made steady gains in education, which translated into increased earning power. What's more, the changing role of marriage may also play a part in women taking more control over the assets of the union. The average age of a bride in 1998 was 25, nearly five years older than in 1970. The theory: Living single longer has better prepared women for managing finances in a marriage.

Yet, marketers, particularly those in the financial services industry, have been slow to take advantage of this shift. Part of the reluctance: The belief that women only handle chump change, and that they are overly-cautious and unwilling to take risks with bigger-ticket items, Cohen says. Yet, 66 percent of female-headed households owned mutual funds in 1998, up from 45 percent in 1996, according to SRI's survey. In fact, women are more confident than ever about their financial prowess. In 1994, nearly 60 percent of women agreed with the statement, "I sometimes feel stupid when asking questions about financial matters." Today, that figure has fallen to 44 percent. "Over the last 15 years, marketing was directed specifically to the male," says Taylor. "Banks are subtly changing that today by putting couples, and more women, into their ads."

Some companies are doing even more, in an attempt to make systemic changes in the way they target couples. For example, American Express Financial Services has discovered that the best way to get a married couple's financial services business is to market to the woman. "It's the woman that gets the husband to sit down with the financial advisor," explains Jane Taffe, marketing director for the women's market at the Minneapolis, Minnesota-based company. "We try to get the couple by going through the woman."

This wasn't always the strategy. Just three years ago, Taffe says that even her firm (and the financial services industry as a whole) didn't understand how to market to women as serious financial decision makers. "Women and men were treated the same," she says. "We'd take existing marketing pieces and change the picture a little, change the copy a little," she says. No surprise, then, that just 9 percent of women surveyed by American Express said that their needs were being met by financial services companies.

More research by American Express revealed that women were specifically looking for information and education, personalized advice from someone they could trust, well-performing investments, and a way to take action to meet their financial planning needs. That's why the company launched an "edumarketing" campaign called Smart Choices. New clients receive an information packet and a specially designed postcard every other month, from their financial advisor.

The packet and the postcard covers topics that women have indicated are important - including those that have special implications for women, such as long-term care. Although the "look" of the pieces is still very feminine - pictures of women in various lifestages, purple as the dominant color - the content is not just men's information in drag. Although American Express hasn't yet repeated their initial survey to find out whether women are more satisfied with their service today, they do know that a full 46 percent of their new clients so far, this year, are households headed by women. When you combine that with their new client households that are women and men together, the percentage of new clients that are women climbs to 75 percent.

The rising economic clout of women is expected to impact a wide swath of industries. However, the financial services sector is probably best poised to benefit from it - especially when the Financial Services Modernization Act takes effect later this year. The legislation effectively increases competition by allowing banks, insurers and brokerage houses to sell a full array of investment products. With this cross-product availability, an already cutthroat market is going to get even more competitive, and the battle for female mindshare will be the key to victory. "Historically, when people talked about selling financial products to women, it was like, `let's make the men wear dresses'," says SRI's Cohen. "Finally, people are getting it that women are financially savvy. But the data shows their decision-making processes are different than men. That means there is going to be a lot of training and re-training of account execs to meet the financial needs of the female decision maker."

A 1998 survey by Raddon Financial Group proved that female investors prefer to get their information in different ways than their male counterparts. Female investors are more likely to prefer to get the majority of their information by talking with an investment advisor, such as a stockbroker or financial planner. Meanwhile, men are more likely to gather the majority of their information by reading about the economy and industry trends. They also found that female investor households are less likely to use a brokerage house then male investors, preferring instead to use the investment services of their bank or credit union.

This may be because banks are more visible in the community. Key Bank, for example, has found that a grassroots approach to targeting women is the key to gaining their business, says senior vice president Jackie Baer-Cowdery. Through focus group research, the bank has discovered that women tend to build business relationships through affinity and networking groups, she says. Which is why many of Key's local marketing efforts are geared towards participating in and sponsoring women-affiliated events and groups. For example, the bank is a sponsor of the "Celebrating Women in Business" forum at the Idaho Small Business Development Center. Key is also a visible sponsor of the National Association of Women Business Owners.

Yet, gender isn't the only factor that influences attitudes of couples. So does geography and age. According to the General Social Survey, older couples are the most likely to keep their finances separated, while younger ones are actually the most likely to combine their money: 40 percent of couples under the age of 30 pool their finances, but the share drops to a third for couples aged 70 and older. And while just 4 percent of couples aged 18 to 29 keep their finances separate, that percentage rises to 10 for couples aged 70 and older.

Although initially surprising, the findings among older couples points to larger issues at play. Factor in the changes that are in store once someone is a senior, and it begins to make more sense. "Older couples are forced to deal with life events, unexpected circumstances such as long-term care, late-life divorce, unanticipated and unwelcome job loss or change, and must financially prepare for them," says Laura Trumble, spokesperson at Scudder Investments in Atlanta, Georgia. Also, it's likely that many couples in this age group were married later in life, and so are likely to have been through the loss of a spouse or a divorce, which makes it more likely that they will keep their money separate.

What about younger couples and their propensity to keep money together? It could be because younger couples have less wealth overall than older couples, leaving them with a lot less to lose by combining their finances. Although many newlyweds pool their finances, financial consultant Melissa O'Gorman, says wives are not taking a back seat to their husbands. "Among the younger generation, the financial relationship is much more equitable from the beginning," says O'Gorman, a second vice president with First of Michigan/Division of Fahnestock & Co. in Grosse Pointe Farms, Michigan.

Geography also plays a role in how married couples manage their checkbooks. In 1998, the Investment Company Institute, an association of mutual fund companies surveyed married households to find out how they made investment decisions. Echoing other studies, they found that in 54 percent of households, husband and wife shared the investment decision for mutual funds, and in 22 percent of households, women were the primary decision makers. However, this was not the case in the Northeast. There, women were the least likely to be the primary household investment decision maker - just 18 percent - while 28 percent had men making the decisions, the largest share for any region.

The situation is reversed in the West. There, 24 percent of households relied on the wife's judgment, and just 21 percent relied on the husband's. Sharing the investment decision was the least likely in the South, although 51 percent of households still did make investment decisions together.

Regional differences aside, the long-term consequences are clear. In ever-increasing numbers, women are in control. Smart marketers who re-educate themselves about who's in charge of the purse strings, will take comfort in their own bottom lines.

Not everybody in the pin-striped set recognizes that both partners in a marriage are likely to be involved in the family finances. But for the designers of the online financial service provider pointpathbank.com, it's a foregone conclusion.

Financial giant Synovus Financial Corp., a banking company based in Columbus, Georgia, recently launched the site to serve the 18- to 34-year-old cohort. Pointpathbank.com will be aimed at people who are about to make some big financial decisions, by serving as the exclusive provider of financial services for The Knot, a wedding information site that attracts about one million visitors each month.

Research by Synovus showed that "money" is always among the top three concerns of newly- and soon-to-be-married couples, and that most planned on merging their financial futures but simply didn't know where to start. "Marriage isn't all about love," says Aimee Davis, the site's marketing director. "It's also about determining who is responsible for paying the monthly bills, budgeting for your next big life event, or coping with unexpected financial emergencies."

While deciding how best to serve this market, Synovus' team made sure to include both the bride and groom. "The gender-based scenario of years past, really is history. [With today's young couples] both are financial providers, and both want to share responsibility," Davis says. "The focus groups showed that if we could create a Web site that's more than a bank, more like a personalized service that helps young couples learn about financial decision-making processes, we could carve a real niche."

The site will provide financial guides such as online calculators that allow a couple to plot their path to retirement and articles that give relationship advice, determining who's the hoarder and who's the spender, for example. There will be the ubiquitous Net bank offerings of ultra-competitive interest rates on checking, savings and investment accounts. And the company is even offering their own VISA gift cards, essentially a universal gift certificate that can serve as a wedding present from family and friends. "Who wants 15 blenders if you can get a gift card that you can use anywhere on the planet?" asks Davis.

The company is betting that by catching a tech-savvy audience at a time when they need a lot of advice, it will tap into a lucrative market. Research by Synovus shows that nearly 444,000 newly-engaged couples will use online banking by 2003, up from 156,000 in 2000. With more than 2.5 million couples becoming engaged annually, Davis says the company is making conservative estimates that its site should attract about 10,000 to 20,000 clients within the first year.

According to Davis, nabbing couples at this point in time allows pointpathbank.com to ride the "virtual on-ramp" into a new couple's financial life. That means that down the road, the site will develop services to help couples plan for their child's education, a vacation home and retirement accounts, among other services.

"What do couples fight about most?" asks Davis. "Money. We can help them make sound financial decisions."

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