COLUMBUS, Ohio, Jan. 25, 2021 /PRNewswire/ -- As the
COVID-19 pandemic wears on, women investors are more concerned
about their finances and feel less prepared than they've been in
years. Nearly three in four (72%) women with investable assets of
$100,000 or more said the pandemic
has negatively impacted their ability to retire. These are among
the latest findings from Nationwide's sixth annual Advisor
Authority study, powered by the Nationwide Retirement
Institute®, reflecting the responses of more than 2,500 individual
investors, advisors and financial professionals.
Women investors in 2020 reported significantly higher levels of
concern about a U.S. economic recession in the next 12 months than
they did in 2019 (82% vs 60%) as well as greater concern about a
bear market in the next 12 months than they did the prior year (74%
vs 57%). Additionally, more than two-thirds of women (69%) believed
that the COVID-19 pandemic would be the most likely cause
of market volatility over the next 12 months. Four in ten women
(40%) also cited the COVID-19 pandemic as the number-one macro
factor that would most adversely impact their portfolio over the
next 12 months.
"Women are concerned about the impact of the COVID-19 pandemic
on their finances and the resulting uncertainty can make planning
for the future—and their retirement—more difficult. For several
consecutive years, our Advisor Authority study has revealed
the disconnect between women's growing concerns about their ability
to retire and their level of preparation—and the pandemic has taken
this to new levels," said Ann Bair,
SVP of Marketing for Nationwide Financial. "While women are acutely
aware of the challenges they face, it's critical that they take
steps now to address gaps in their retirement plan, especially as
we start a new year."
Less Optimistic, More Concerned—and Less Prepared to Protect
Assets
Given their concerns about the economy, the market
and the impact of the pandemic, it follows that women investors
were significantly less optimistic about their financial outlook in
2020 compared to 2019 (32% vs 56%). Likewise, men also cited a
significant decline in optimism in 2020 (39% vs 53%).
Women were somewhat more likely than men to cite their biggest
financial concern as losses in their portfolio related to the
COVID-19 pandemic (36% vs 30%). In addition, even more women than
men said that protecting assets was their top financial concern
(36% vs 28%). In fact, the number of women who cited protecting
assets as a top concern increased 10 percentage points in 2020,
after steadily declining for the previous four years (2020: 36%,
2019: 26%, 2018: 28%, 2017: 30%, 2016: 32%).
Yet, despite greater concerns about losses to their portfolios
and protecting their assets, findings revealed a preparation gap as
women were somewhat less likely than men to have a strategy in
place to protect their assets against market risk (60% vs 67%).
Meanwhile, women were more than twice as likely as men to say they
didn't know if they have a strategy (15% vs 7%).
Preparation Gap Persists When Protecting
Retirement
The COVID-19 pandemic has disrupted women's retirement plans.
Nearly three-fourths of women (72%) said the pandemic has had a
negative impact on how long they could live off their retirement
savings. Due to the pandemic, more than two in ten women investors
(22%) said it's likely they would need to delay taking retirement
income for the next 12 months and nearly one-quarter of women
investors (24%) said they would need to reduce the amount of their
retirement income withdrawals for the next 12 months.
Meanwhile, women are likely to live longer than men and are
likely to face a retirement income shortfall. Over one third of
women (39%) expect to need 20 years of income in retirement.
Another third (35%) say they'll need 30 years or more. But only one
in five women (20%) say they'll be able to live off their current
retirement savings for more than 30 years
Yet, women were also less likely than men to say they have a
strategy in place to protect themselves against outliving their
savings (76% vs 84%) and five times more likely to say they didn't
know if they have a strategy (11% vs 2%).
In addition, women were slightly less likely than men to cite
saving enough for retirement as a top financial concern (16% vs
17%). Notably, the number of women who cited saving enough for
retirement among their top financial concerns dropped eight
percentage points this year compared to last year, after a slight
decline over the prior four years (2020: 16%, 2019: 24%, 2018: 26%,
2017: 28%, 2016: 28%).
The Value of Financial Advice
The news isn't all bad.
For the first time since launching Advisor Authority, more
than two-thirds of women reported that they worked with an advisor
or financial professional—a nearly 10-point increase in 2020 over
2019 (67% vs 58%).
"Now more than ever, women are seeking the help of financial
professionals to put a plan into place to protect their assets,
manage volatility and save for retirement," said Lori Hall, Director, Strategic Accounts
Nationwide Financial. "Advisors and financial professionals have an
opportunity—and a responsibility—to understand women's retirement
planning needs and help them establish a holistic plan to manage
through the current uncertainty while remaining focused on long
term goals."
Advisors and financial professionals can help women bridge the
preparation gap. Women with an advisor said the number-one reason
they choose to work with a financial professional was to feel more
confident in their financial future (35%). When markets are
volatile, women with an advisor said the number-one benefit of
working with a financial professional is to protect their assets
against market risk (26%). Among women who did not have an advisor,
56% said it was because they prefer to manage their own
assets.
Solutions to Bridge the Gap
The COVID-19 pandemic is driving the need for more guaranteed
solutions to help women protect their financial futures. In fact,
given the impact of the pandemic, nearly six in ten women (59%)
said they'd feel more secure if a portion of their portfolio was
invested in an annuity to protect against market risk and more than
half (55%) said they would feel more secure if a portion of their
portfolio was invested in an annuity to protect against outliving
their savings.
Despite challenging markets, more than two-thirds of (67%) women
and men said that they did not feel pressure to revise their
investing strategy over the next 12 months. While women and men
were most likely to protect against market risk using
diversification (52% and 59%) and fixed annuities (39% and 34%),
women were nearly twice as likely as men to say they used Fixed
Indexed Annuities (26% vs 15%), while they were far less likely
than men to use Registered Indexed Linked Annuities (3% vs
16%).
To help protect against outliving their savings, women and men
were most likely to use Social Security (both 68%) and defined
benefit plans/pensions (42% and 45%). However, women were somewhat
less likely than men to use other guaranteed income solutions to
protect against outliving savings, such as deferred income
annuities (DIAs; 10% vs 12%), single premium immediate annuities
(9% vs 16%) and qualified longevity annuity contracts (QLACs; 8% vs
11%).
For more insights on women investors this year, advisors and
financial professionals can also download the latest Advisor
Authority infographic at:
https://news.nationwide.com/women-investors-concerns/
Nationwide's sixth annual Advisor Authority study powered
by the Nationwide Retirement Institute explores critical issues
confronting advisors, financial professionals and individual
investors—and the innovative techniques that they need to succeed
in today's complex market. This is the fourth in a series of
ongoing releases from the sixth annual study.
About Advisor Authority: Methodology
The sixth
annual Advisory Authority Survey was conducted online within
the United States by The Harris
Poll on behalf of Nationwide from May
27 – June 25, 2020 among 1,768
advisors and financial professionals and 817 investors, ages 18+.
Among the 1,768 advisors and financial professionals, there were
758 RIAs, 642 Registered Reps, 500 Wirehouse and 165 other
advisors. Among the 817 investors, there were 297 women and 520
men. Investors are weighted where necessary by age by gender,
race/ethnicity, region, education, income, marital status,
household size, investable assets and propensity to be online to
bring them in line with their actual proportions in the population.
Respondents for this survey were selected from among those who have
agreed to participate in Harris Poll surveys. Because the sample is
based on those who were invited to participate in the Harris Poll
online research panel, no estimates of theoretical sampling error
can be calculated.
About The Harris Poll
The Harris Poll is one of the
longest running surveys in the U.S. tracking public opinion,
motivations and social sentiment since 1963 that is now part of
Harris Insights & Analytics, a global consulting and market
research firm that delivers social intelligence for
transformational times. We work with clients in three primary
areas; building twenty-first-century corporate reputation, crafting
brand strategy and performance tracking, and earning organic media
through public relations research. Our mission is to provide
insights and advisory to help leaders make the best decisions
possible. To learn more, please
visit www.theharrispoll.com.
About Nationwide
Nationwide, a Fortune 100 company
based in Columbus, Ohio, is one of
the largest and strongest diversified insurance and financial
services organizations in the United
States. Nationwide is rated A+ by both A.M. Best and
Standard & Poor's. An industry leader in driving
customer-focused innovation, Nationwide provides a full range of
insurance and financial services products including auto, business,
homeowners, farm and life insurance; public and private sector
retirement plans, annuities and mutual funds; excess & surplus,
specialty and surety; pet, motorcycle and boat insurance. For
more information, visit www.nationwide.com. Follow us
on Facebook and Twitter.
Nationwide, Nationwide is on your side, the Nationwide N and
Eagle are service marks of Nationwide Mutual Insurance Company. ©
2021
ASM-1424AO
Contact: Meghan
Busch
Bliss Integrated Communication
212-840-1661
MBusch@blissintegrated.com
Deborah Newman
Nationwide
502-587-3858
newmad4@nationwide.com
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