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Why Every Woman That Works in Financial Services Should Have a “Wealth” Plan

Are there any money moves that you wish you had made earlier in your career? As a professional who has worked for over 30 years in the field of finance, I know how hard it can be to ask for help with your finances. If you work in the field, you should be the expert, right? Well, if you work in finance, you know this isn’t true. Just like doctors don’t know everything about medicine, finance is complex with different specialties and subspecialties. All that to say, even if you work in financial services, you will face financial situations or questions throughout your life that you cannot answer. And that is OK.

Here is what I want all women to know about wealth creation and why I think every woman who works in the financial services industry should have a wealth plan.

Eight Money Moves That Matter

#1. Understand your compensation options.

I had the same salary for 13 years. Most of my compensation was driven by incentive comp.  Creating a spending plan and intentionally putting aside a percentage of my bonus each year allowed me to invest and create wealth. At first, having such variability in my income was a bit daunting. But by having a plan in place that addressed the ebbs and flows of my variable income, I eventually began to feel more comfortable and less stressed about my overall financial picture.

#2. Push for incentive compensation. Cash is one thing, but other forms of compensation, such as restricted stock units, equity, and stock options, can usually yield more upside. Salaries are a good starting point, but the total compensation package is what really matters.

#3. Bank the good years. How often did you have your compensation go up 10% one year and then up another 10% the following year? Only then to have your comp go down by 40% the year after that. With mine, it was quite often, but a lot of that was due to the variability of markets. But even in the down years, my overall compensation was still significant and more than I had ever expected to make. Having a savings strategy in place allowed me to start investing early in my professional career.

#4.  Access all of your opportunities. Women invest in ourselves, in our families, in our communities, and in our careers.  By investing, we can build our wealth to take care of ourselves, our families, and the things that matter most to us. Investing is a long-term strategy to grow your wealth. Asset allocation, diversification, risk tolerance, and investment time horizon are all factors that come into play with this concept. For women in financial services, there is often the opportunity to access unique investment opportunities such as private equity or venture capital funds. Hopefully, you are taking advantage of these unique opportunities. Money is power, and it is exciting to see more women step up and acknowledge that they are investors.

#5.  Put your money to work. The good news is there are many ways you can put your money to work as an investor and earn returns (and benefit from the power of compounding when your returns earn returns). You might have a rental property that provides you some income, while your 401(k) is invested in a diversified portfolio of ESG investments. There is more than one way to grow your wealth!

#6.  Work with a financial advisor.   A good friend of mine reminded me of how easy it is to get distracted with life, which results in pushing your own finances to the bottom of your to-do list. As a wealth advisor, my job is to think about all aspects of my client’s wealth, including their investments, their overall financial plan, estate plan, philanthropic endeavors, insurance protection, and most importantly, tax planning! As one client told me, “by having you as my financial ally, you free up space so I can live and enjoy life.”

#7.  Relax; unexpected things will happen.   Even the best-laid plans will sometimes hit a speedbump. Recognize that some factors may be out of your control. Market trajectories are rarely straight up without corrections. (Remember 2008? And how can we forget a year ago when the pandemic hit the United States in full force.) You can be doing all the right things, but sometimes you need to be patient and remember to take a long-term view.

#8.  Understand your relationship with money.  Women need to talk more about money.  While our day jobs are focused on markets, asset allocation, investing, and all things in the world of finance, do you have a plan for your wealth creation? Do you know what your number is? What are your beliefs and attitudes about money? Your relationship with money will drive many of the wealth-building decisions you will make.

Creating a Wealth Plan

Did any of these points resonate with you?  If you are thinking about starting or re-examining your wealth plan, that is great! You are taking charge of your financial health. I know how hard it can be to focus on complex personal financial management when you have a demanding career and family obligations. As a financial services professional, it can be intimidating to ask questions you think you should know the answers to. If you need an ally, who understands the unique needs of professional women in the financial services industry, and who will answer your questions without judgment, I am here to help. With a wealth plan and an ally, you can feel less stress around your finances and more confidence in your financial future.

 

Kathleen McQuiggan
Kathleen McQuiggan
Kathleen McQuiggan is a Wealth Advisor at Artemis Financial Advisors where she works with clients to create sustainable financial plans and investment portfolios.

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