Why are so many young women disengaged with long term investment, wealth creation and in particular, their superannuation? Financial PR specialist Lauren Nowak suggests it comes down to communication.
The financial landscape is complex and an understanding of financial matters is an important life skill for all. I am particularly passionate about financial freedom for women which comes from financial literacy.
I find myself easily riled when I hear about the increasing pay gap, the lower level of workplace participation and the superannuation gap.
I also find it disappointing when I’m talking with my peers (mid-twenties to thirties females) and they wave off any serious financial discussion or get the whole concept in general, completely wrong. Case in point: a friend of mine who when listening to me complain about cost-cutting to squirrel away a 20% house deposit, was adamant I could draw on my superannuation as my deposit. ADAMANT.
It must be noted that I am in an advantageous position because as a communicator specialising in financial services, I have access to clients within the sector and regularly consume financial and business media.
However I haven’t always been in this situation. Before starting this job I took stock in order to better my financial situation and set myself on the path of financial independence.
But it didn’t come as a result of the multiple lectures from my parents, or the persistent marketing from financial service providers. Instead, it came from the prospect of being employed in an industry where I would be preaching, but not practising.
Up until then, I wasn’t financially illiterate at all, just disengaged, and nonchalant. In my own words, it was a problem for future Lauren.
My own experience leads me to wonder whether my peer group, and potentially my generational cohort, are also disengaged. This then creates a very large problem for communicators when trying to talk financial literacy to women.
How can it be that despite having a wealth of information at our fingertips, all the recent changes to the financial landscape and all the opportunities we’ve had, it is possible to be so disengaged?
Can it be that this disengagement is a result of communication in the wrong form? Are communicators speaking to women in a language that engages them? Or repels them?
How you deliver it
Research undertaken by All About Eve covering both what women say (qualitative and quantitative) and also what triggers much of that in the subconscious, has shown that most women have a different relationship with money to most men. While they feel very comfortable with day-to-day finance such as banking and budgeting, even believing they are better at it than men, this comfort level changes when we talk about longer term finances. There are many factors behind this but it’s interesting to note the role that communications and language play in this, on several levels.
We’ve all heard this – Data released by the Australian Bureau of Statistics shows that the average man working full-time earns 18.8% or $298.10 more than the average full-time working woman.*
Since November 2013 it’s gone up by +1.4 pp and since November 1994, the gender pay gap has increased by over two percentage points (+2.6 pp). This, compounded with the need to take extended career breaks to look after children and elderly parents, translates into a superannuation gap of 47%. Women are currently retiring with $90,000 less than men, and 29% of women over 65 are living below the poverty line.
Linda McGregor, Founder and Business Principal at All About Eve, says that by the nature of this ongoing rhetoric, women are subconsciously being told that it is the norm is for them to have poor retirement plans and wealth. And by doing so, the unconscious message and frequent takeout is that it is very difficult to change this situation as the odds are stacked against you.
“Instead of inspiring women to engage and take action, our media and provider message is often reaffirming to women that it’s not worth trying to change,” she says.
“We totally acknowledge that this is not the intention of the conversation, but the nature of the arguments put forward unwittingly disengage us as busy humans. We instead focus our time and efforts on areas which there is more likely to be a better change of ROI (of effort).”
The type of language is another issue. So often there are lots of financial terms and jargon, instead of everyday language.
“Lack of comfort means psychological ‘paralysis’ both at the point of starting to change your wealth-future and taking to time to follow through,” McGregor says. “Furthermore, the use of this more ‘rarefied messaging’ implies to women that the area of wealth creation is one that requires expertise and depth of knowledge to understand the correct path to take. Given how the female brain makes decisions (always looking for a Perfect Answer™) then you start to see how the exclusive nature of the type and nature of the language is far from motivating.”
John Hewison,* Chair at Hewison Private Wealth, agrees with McGregor’s sentiments, believing that making decisions and discovering on a solution can be quite an emotional process for women. “I would also add that they are most likely to be a lot more switched on than men when it comes to challenging and evaluating. In other words, I think they have much better BS-metres than men,” he said.
“A lot of masculine communication to women in respect to things like finances can be condescending, which frankly I find insulting. When it comes to financial literacy, this is a skill set not a question of intellectual capacity.”
Change your tune
Another consideration for communicators when messaging is the tone used and approach. McGregor points outs that much of the nature of financial copy takes an educational, “we know better than you” tone. This does little to pull a female audience into a conversation – and certainly not one where she can easily feel the brand or advisor is a trusted advisor looking out for her interests.
Working face to face with women, Hewison sees firsthand the sensitivities that come with communicating to women and ensures advisors treat both audiences with equal respect and importance. “It is our view that effective communication with both men and women needs to be tempered to suit the situation and the personality to whom you are attempting to communicate. A lack of sincerity will be quickly recognised.”
Most importantly, know your target audience
For communicators looking to target women, McGregor suggests a better understanding of how women communicate versus men, how the female brain requires different inputs in order to work through the decision making process, and the subtle differences to females with the use of words such as “money” and “finance”.
“These areas start to touch on the knowledge required if we are going to achieve success in getting more women to not only engage with long term finance, but be inspired to have genuine financial literacy to ensure their financial futures, whether they are single, married, divorced, SINKS or mums,” she says.
The game changer in terms of successfully changing brand owners’ campaigns could be simply flipping your message to make it positive and empowering, instead of relegating women to the position of victim.
* Lauren undertakes PR consulting work with John Hewison.