Understanding The Money Behaviour Of The Venusians!

By Suresh Sadagopan

Men are from Mars. And women are from Venus - they say.

We cannot confirm the Martian origins of men, much less the Venusian origin of women, with any degree of conviction.

We can only guess that men landed on Earth to escape a forbidding Martian landscape with its sterile, life-sapping environment. Similarly, we can only conjecture that they found the carbon dioxide in the Venusian atmosphere stifling!

However, the polar opposite ways in which men and women think and behave seem to lend credence to their drastically different otherworldly origins!

As advisers, we have had the opportunity to interact with hundreds of people from both sexes, and what we have found about women is interesting.

Security – Women crave security. This is very evident in multiple ways. They maintain a good balance in their savings account to ensure that they always have money handy. Over and above this, they maintain further near-cash amounts as FDs in their banks to ensure easy liquidity, should the need arise. Also, bank FDs are safe and solid and have a calming effect on them.

At another level, women seek the stability and security that come with owning a home. A rental accommodation is unsettling for them and gives them a feeling of rootlessness and drift. Their own home makes them feel secure and grounded.

Risk-taking – Most women tend to favour solid investments and want to take lower risks. They tend to favour FDs, Bonds, small saving instruments, Gold and real estate.

Even if they do take some risk and invest in equity-oriented investments, they tend to stay on the conservative side. They may be more comfortable with the large caps and hybrid funds rather than, say, small caps and thematic funds.

They do not normally venture into new-age instruments like Crypto assets, REITs, Digital Gold etc. Even equities, international investments, venture funds, etc., usually do not find favour with them.

In a nutshell, they prefer low-risk assets, even if the returns are moderate.

Money & Returns – Women do not agonise so much over returns ( unlike a majority of men ) and tend to take an approach that is goal-oriented rather than one focused on returns. They are far more outcome-based in their approach and are in for the long haul, keeping the bigger picture in mind. Women seem to understand clearly that money is a means to an end, not an end in itself.

They can even take volatility in their stride in spite of their generally lower risk-taking profiles. Once they trust the advisor and are convinced that their portfolio has been built right, volatility does not spook them, and they stay the course. They just need to know that things are in control and the portfolio will eventually stabilise.

Allow to be chaperoned - When it comes to handling money, a disconcertingly large number of women are not hands-on. This includes those who are highly educated and earn well. There seems to be an aversion to managing money and an instinctive tendency to hand over the reins to others, like their father, husband, brother, friend, etc.

Many times, women do not pay attention to financial concepts and products, or do not want to read brochures, and they simply go with the suggestions of whoever is managing their money. This becomes a problem as the money is being managed based on the risk profile and inclinations of the money caretaker rather than of the person concerned. Also, the person managing the money is not an expert, which makes for a patchwork portfolio without any overarching framework. This makes them financially vulnerable.

Accessing advice - Considering that women inherently do not want to manage their finances themselves (as they claim they do not have an aptitude for it), they should approach professional financial advisors.

Surprisingly, a very small percentage of women approach professional Financial Advisors as compared to men. That is probably due to their lack of awareness about how a financial advisor can be the best fit for them and can turn around their fortunes, especially considering their qualities and temperament for a fruitful advisory engagement.

Advisor's viewpoint - Women are an advisor's delight. When they approach an advisor, they come with the attitude of wanting to be guided, don't carry prior strong notions about finances, are modest and self-effacing, and are willing to change if they have to.

They want their advisor to understand them well - their personality type, lifestyle choices, their situation, goals and concerns. They also want their advisor to understand their risk profile and want a portfolio that would work for them and not cause them further stress.

Women are careful and evaluate the advisor well before trusting them. This may take some time, but once they are convinced, they trust their advisor fully and go with their advice 100 per cent. After this, they may be willing to be persuaded about investments or strategies that they may not even be fully convinced about. This makes them an ideal type of person to provide advice to. This allows the advisor to produce, over time, the best results for them.

The Venusians should actively seek out financial advisors considering that many are pursuing professional careers and are earning well. Their temperament is a great fit for an advisory engagement, and they are bound to shine like Morningstar that Venus verily is!

The author is the MD & Principal Officer at Ladder7 Wealth Planners and the author of the book "If God Was Your Financial Planner".

(Disclaimer: Views expressed are the author’s own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.)