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The Importance of Inclusive Financial Planning

The Importance of Inclusive Financial Planning

| April 10, 2024

Please take a moment, close your eyes, and imagine it is 2040...

Female investors now control 70% of the wealth in the United States. If you are a practitioner, what does your firm look like? Did you build relationships with your female clients? Did you grow? Did you sell? Did you close up shop?

If you’ve hired a wealth management firm, have they evolved? Do they assist you in holistic planning? Do they talk to you and your spouse? Do they represent a diverse population of people?

Open your eyes. How do you feel?

As a CFP® practitioner, I would argue that financial planning is crucial for building a stable and prosperous future, enabling individuals to achieve life goals and secure their financial well-being. However, I have noticed that one often overlooked aspect of financial planning is the significance of involving both partners in the process. At BMG Advisors, we believe it is essential to prioritize inclusivity for the benefit of clients and the long-term success of our firm. Here are some key considerations we utilize to foster inclusive financial planning and strengthen client relationships.

Inclusive financial planning strengthens the bond between partners by fostering open communication and trust and helps create shared goals. According to a study published by Forbes Advisor in 2023, 43% of couples marry to increase financial security. Conversely, one of the most common reasons individuals divorce in the US is financial concerns. Both emphasize the importance of transparent and inclusive financial planning. Involving both partners in financial planning encourages honest discussions about financial goals, priorities, and concerns. Through collaborative decision-making, couples can better understand each other's financial values and aspirations, building a stronger foundation for their relationship.

Inclusive financial planning promotes financial literacy and empowerment for both partners. It's not unusual for one partner to be more interested, informed, and comfortable with money and financial decisions than the other. Advisors should do their best to encourage both parties to (1) pay attention, (2) participate and (3) learn. Historically, there has been a gender gap in financial knowledge and confidence, with women often being less involved in household finances. By actively involving both partners in financial discussions and decision-making processes, couples can bridge this gap and ensure that both individuals have a comprehensive understanding of their financial situation. Advisors can help facilitate this by encouraging each spouse to attend meetings, talking to and asking questions of both partners, and structuring communication that includes both parties.

Practices prioritizing inclusive financial planning are poised for long-term growth and asset retention by future-proofing their practice. One of the reasons clients have chosen our firm is our diverse team- one of our strategic advantages. The decision to hire female advisors is not just about meeting quotas; it's a meaningful demonstration of commitment to inclusivity and gender equality. By providing opportunities for women in traditionally male-dominated industries, such practices foster a more inclusive workplace culture. The presence of female representation within the team is a powerful symbol, inspiring confidence and trust among female clients. These clients often seek advisors who understand their unique perspectives and challenges. Practices embracing this inclusive mindset are poised to serve clients well for generations to come.