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Women and Wealth: The Million Dollar Question

By Mary John, Senior VP Wealth Advisor Wells Fargo Private Bank

According to The Female Economy, published in the Harvard Business Review in September 2009, women controlled 51.3 percent of wealth in America, which amounts to about $14 trillion in personal wealth.

By 2019, the study projects that figure to grow to $22 trillion. This research reveals the “new normal” that is sweeping across the nation, and may likely result in more of the next generation of American families being financially supported by women rather than men. These staggering statistics cause many people to wonder: are women prepared to handle their new financial situations?

With the changing times upon us, it’s more important than ever for women to be know about wealth management.

To help with a potential financial knowledge gap, women should seek experienced advice on how to manage their financial life. Taking control of your finances begins with creating a well-crafted plan and seeking qualified guidance to help you take into consideration both your short- and long-term goals.

Women may want to consider the four following steps when examining their financial situation: (1) understand their goals and objectives, (2) review all financial statements, (3) find potential gaps in their financial situation and (4) evaluate credit and investment recommendations for them to achieve their financial goals.

Reviewing financial documents is a crucial step to this process that includes reviewing estate-planning documents, i.e.; will, revocable trust, health-care directive, financial power of attorney, life, property and casualty insurance statements, investments, and personal financial statements.

Once an initial review process is in place, women may want to meet with their wealth-management team including specialists in banking, investments, and estate planning, at least once a quarter.

I especially encourage my female clients to participate in all financial review meetings with their spouses, as it is equally important for women to understand how their assets are being managed, and if their investment objectives are in line with their life goals.

All investors should understand their balance sheet and know the status of their individual and joint accounts. Many individuals, because of the size of their net worth, have a number of advisors managing their investments at multiple institutions. Having various institutions managing your assets may mean that you are not necessarily diversified. Therefore, investors may want to consider sharing all their investment statements with their advisors to review that their investments are properly diversified and are being managed in a tax-efficient manner.

Wells Fargo Wealth Advisors are available to coordinate with the appropriate Wells Fargo investment specialist to analyze your financial situation and help determine your risk appetite.

Most importantly, we want our clients to understand why they own the investments that make up their portfolio, and what amount of risk those investments are exposing clients to. For example; what asset classes represent—inflation protection, growth, volatility, income, catastrophe, or liquidity? By examining your financial situation through the risk lens and with the help of your advisors, you may better understand how your money is being managed.

Risk management is the key to bringing it all together. Once you have created your wealth, you need to review that you have proper insurance strategies in place. As an example, life or health insurance is typically much easier to obtain when you’re in perfect health. But who can know when your health or the health of your loved ones might deteriorate? Women need to be prepared for the odds in their lives (i.e.; death, disability, and divorce), and know that what happens to other people, very well could happen to you too.

According to the book Family Wealth, Keeping it in the Family, by James E. Hughes Jr., financially prepared children become better heirs. And why not? After all, they may have to learn to manage your estate, in case something were to happen to you.

In my client experience, we often come across heirs unprepared to handle their own finances, let alone manage a complicated estate. While inheriting $1 million dollars today may seem to your heirs as a significant amount of money, in reality, it may not be enough to quit working. To help ensure such inheritance lasts a lifetime, the assets should be invested in a diversified pool of asset classes to provide a stream of income and generate growth to outpace inflation.

Even as a wealth advisor, I have faced difficult financial experiences as a result of divorce and death in my family. While challenging at the time, those life lessons turned out to be invaluable experiences for me, and in the end taught me to be a better advisor to all my clients. I welcome you to contact me to review your personal financial situation and goals.

Wells Fargo Private Bank, 433 N. Camden Dr., Suite 1200, Beverly Hills, CA 90210. Tell-310.285.5852

DisclosuresWells Fargo Private Bank provides products and services through Wells Fargo Bank, N.A. and its various affiliates and subsidiaries. The information and opinions in this report were prepared by Wells Fargo Private Bank. Information and opinions have been obtained or derived from sources we consider reliable, but we cannot guarantee their accuracy or completeness. Opinions represent Wells Fargo Private Bank’s opinion as of the date of this report and are for general information purposes only. Wells Fargo Private Bank does not undertake to advise you of any change in its opinions or the information contained in this report. Wells Fargo & Company affiliates may issue reports or have opinions that are inconsistent with, and reach different conclusions from, this report. Asset allocation and diversification do not assure or guarantee better performance and cannot eliminate the risk of investment losses. Investment & Insurance Products: *Not FDIC Insured *No Bank Guarantee *May Lose Value Wells Fargo Bank, N.A., member FDIC.

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