Wells Fargo Study: As Women Achieve Affluence, Does Investing Confidence Follow?

At a time when women make up about half the U.S. workforce and have been encouraged to take charge and “lean in,” more than two out of five working married affluent women (44%) between the ages of 40 and 69 report that they earn about the same (20%) or more (24%) than their spouses, according to a new Wells Fargo Affluent Women Retirement Survey (NYSE:WFC). The telephone survey, conducted by Koski Research of 600 women with a median of $455,000 in investable assets and $145,000 in household income, examined affluent women and their perception of wealth, investing and retirement.

As affluent women gain wealth, two-thirds say having more money has made them “thriftier” and 58% describe themselves as “savers.” Yet, having wealth and strong savings values do not translate into women who also feel very confident in their investing ability. Two in five affluent women (41%) say they are “not at all” confident in their ability to invest.

“Today’s affluent women are financially savvy working women, but investing confidence doesn’t follow hand in hand with increased wealth,” said Karen Wimbish, director of Retail Retirement at Wells Fargo. “Through our research, we see that investing confidence seems to be the linchpin to so many other positive behaviors that would provide an opportunity for women to grow their savings and to build a solid foundation in retirement.”

Affluent Women and Investing in the Stock Market

According to the survey, 41% of all affluent women do not believe the stock market is the best way to grow savings, versus 52% who do. About a third of affluent women (34%) say that the stock market is “too risky” for them. In fact, as affluent women have built wealth, 64% say they have become more risk-averse. Fifty-eight percent of affluent women say they are not interested in learning more about how to invest in the stock market.

While more than half of affluent women do not have interest in learning more about stock market investing, a clear majority (91%), say it is important that women be confident in their ability to invest, yet only 8% describe themselves as “extremely confident.” Forty-nine percent of women say they are “somewhat confident” in investing, and 41% say they are “not at all confident.”

“I find it so interesting nearly all of these women say confidence in investing is very important – they recognize the power of confidence but at the same time, they are ambivalent about their own confidence and a majority is not interested in learning more. These women are in households with very strong resource levels, so the next step is to be totally aware of how the market can help them and to feel in control of their efforts to invest and grow savings for retirement,” added Wimbish.

The Confidence Correlation

Confidence in investing among affluent women correlates to attitudes and choices that differ greatly from those of women who describe themselves as not confident at investing.

• A greater percentage of confident women (59%) say the stock market is the best place to grow savings over time, while 44% of those who are not confident investors agree with this. Forty-nine percent of women who are not confident in investing say the stock market is too risky for them versus 23% for the confident women.
• Seventy-three percent of confident married women say either they alone or in conjunction with their spouse make the household investment decisions versus 49% of those who describe themselves as not confident in investing.
• Two thirds (67%) of confident women say they were “taught about investing by someone” versus 39% of the not confident.
• Almost half (47%) of confident women are interested in learning more about how to invest in the stock market versus 35% of the not confident.

More than half of affluent women (56%), regardless of investing confidence levels, say men were given more of an opportunity to learn about investing than women, while 41% say both sexes were given equal opportunity to learn. Half of affluent women feel men have more confidence in investing ability, but only a quarter think men are actually more skilled in investing.

“We see that women, who were taught about investing by someone, tend to be more confident in investing. Financial literacy makes a huge difference and has positive rippling effects for future generations,” said Wimbish.

Aspirations and Fears about Retirement

The majority of affluent women (88%) feel a successful life is best defined by “peace of mind” over great achievements (10%). Women say that a successful retirement is comprised of having enough money to live the lifestyle they want (39%), being healthy (30%) and spending time with family and friends (16%).

As affluent women think about living in retirement, 40% say “running out of money” scares them. In fact, 45% of working affluent women say the prospect of living in retirement without a paycheck is something they will “resist as long as possible by working.” For affluent women in their 40s, 52% will resist as long as possible.

More than half of affluent women (57%) most often say they are scared by “living in poor health for many years in retirement,” which is over three times more than their fear of having to work forever (16%). Healthcare is the top ranked topic discussed by women and their spouses as well as women and their female friends. However, nearly a third of married affluent women (29%) and their spouses have not discussed “how they will address any potential major healthcare issues.”

While a comfortable retirement is a goal for women, fewer than 40% have a written retirement plan. They report needing a nest egg averaging $1.5 million and expect to retire at the age of 66 (average) and project that their savings will need to last an average of 18 years.

“There are many unknowns in retirement, but having a comprehensive retirement plan can guide you to a successful retirement. Women have made so much progress professionally and should leverage what they already have to create that 'paycheck' in retirement and have financial freedom,” Wimbish added.

For help understanding how to prepare for and live in retirement, visit Wells Fargo’s retirement site at https://www.wellsfargo.com/investing/retirement/ or visit the blog Beyond Today at http://blogs.wellsfargo.com/retirement/.

About the Survey

This study was conducted by Koski Research, Inc. an independent research firm. Telephone interviews lasting approximately 20 minutes were conducted among a national U.S. sample of 600 women between the ages of 40 through 69 with household investable assets of at least $250,000. Interviewing dates were June 27 through August 4, 2013. Figures for marital status were weighted to bring them in line with their actual proportions in the population. In reading the results of this study, the general rule of thumb is that the margin of error is about 4% on the total sample and greater when looking at results for specific subgroups.

About Wells Fargo

Wells Fargo & Company (NYSE: WFC) is a nationwide, diversified, community-based financial services company with $1.4 trillion in assets. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial finance through more than 9,000 stores, 12,000 ATMs, and the Internet (wellsfargo.com), and has offices in more than 35 countries to support the bank’s customers who conduct business in the global economy. With more than 270,000 team members, Wells Fargo serves one in three households in the United States. Wells Fargo & Company was ranked No. 25 on Fortune’s 2013 rankings of America’s largest corporations. Wells Fargo’s vision is to satisfy all our customers’ financial needs and help them succeed financially. Wells Fargo perspectives are also available at blog.wellsfargo.com.

About Koski Research

Koski Research is an independent marketing research firm that provides public opinion research and custom research solutions for Fortune 1000 companies.

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