March 2015 10 Questions

Journal of Financial Planning: March 2015


Who: Eleanor Blayney, CFP®

What: Author, speaker, CFP Board’s consumer advocate

What’s on her mind: “Wanting to fix right away and listen later is a real problem. Yes, advisers are problem-solvers, but we need to understand the person who has the problem first before we have the solution to it.”

Podcast: Listen to our podcast with Blayney HERE.

With a mix of prestigious liberal arts and business school degrees in hand, Eleanor Blayney was making a name for herself doing government consulting work in Washington, D.C. in the 1970s. But a career change was in her future; she wanted to do work where she could make eye contact with the people she was helping. She wanted to have real and personal impact. This desire led her to financial planning.

Blayney spent two decades as a financial planning practitioner, during which time she carved out a niche for herself by having a true passion for helping women gain the confidence that is sometimes needed to be financial decision-makers.

Today, Blayney serves as CFP Board’s consumer advocate, reaching out to consumers to help them understand how financial planning and CFP® professionals can improve their lives. She does this through various efforts, from video clips to consumer guides to speaking engagements.

The Journal recently sat down with Blayney to learn more about her thoughts on the unique challenges and opportunities both women investors and women planners face, as well as how her efforts are helping to increase awareness and appreciation of the CFP® designation.

1. You were a practitioner for two decades and have a passion for serving women clients. How are the financial planning needs of women distinct from those of men?

First, it’s important we recognize that in many cases, women are probably more like men than they are different. Both men and women worry about their retirement security, and making the right investments, and tax compliance and planning, so there’s a lot of overlap in terms of their needs. But by the same token, the more I worked in my practice and saw more and more women clients, I became convinced that there were really important differences that we needed to understand. I was also becoming more aware of research studies on gender.

One of the most important pieces of research was done by The Boston Consulting Group in 2009. It was a global study of women that looked at how women’s needs and wants were being addressed by the major service industries. They were looking at clothing retailers and medical providers, and a variety of services and product providers, asking women, “In this particular industry segment, how well are your needs met? How responsive are they to your concerns and requirements?”

Two dozen or more industries were looked at in this study, and financial services was right at the bottom, in the view of women. So if nothing else, we had a real gender gap in terms of perception and satisfaction with what financial services were offering. 

That got me thinking: what are some of the differences [between men and women] I’ve experienced as a practitioner? I think [the answer] is subtle but it’s important. It’s not necessarily that women want to hear about estate planning and men want to hear about investments; it is less in terms of the content, and more in terms of the delivery of advice and how we, as advisers, are working with women.

I was observing that women were wanting the context of our advice, the process of our decision-making, and not just bottom line, not just results. They wanted to understand how the adviser was thinking and how decisions were being made. They wanted to be educated. 

I sensed a real hunger on the part of women to understand, but they didn’t want to be intimidated, and they didn’t want to be patronized as they sought that understanding. They wanted to be involved. 

It’s not the content of the advice; it’s primarily the delivery of that advice that, for me, sets women apart in terms of their needs and what they require.

2. In your experience working with financial advisers and planners, what is the biggest mistake they make when working with women clients?

There are several. I think we’re all guilty—women advisers as well as male advisers—of unconscious stereotyping in terms of what we think our clients need and want. 

I remember being part of a study group many years ago, and over and over again you would hear, “women just want us to get it done for them.” There was this idea, especially for the widows, to just “take care of them; they don’t really care what we’re investing, just do it.” And I think sometimes we held onto that.

Meanwhile, women were becoming more educated; they did want to be more involved; they were finding themselves on their own, having to make financial decisions, and they didn’t want, “There, there, dear, we’ll take care of it for you.” They wanted to be informed and involved. Now, that often included preliminary education. Many women needed catching up in terms of basic financial awareness and literacy. But I think we made the mistake of treating them as if they were helpless. Now, many advisers did not, but my sense was that they were different in that way. 

Also, I think as advisers, we’re in the business of fixing, solving problems, advising—rather than listening. We jump to the answer sometimes before we’ve even heard the question, and I think women can be very sensitive to that. Wanting to fix [issues] right away and listen later is a real problem. Yes, advisers are problem-solvers, but we need to understand the person who has the problem first before we have the solution to it.

3. You have served as CFP Board’s consumer advocate since 2009. How do you think the public’s understanding of the importance of working with a CFP® professional has changed since then? And tell us a little about your role in influencing that understanding.

There has been a definite and measureable uptick, not just since I’ve been here, but over these years. And I like to think that I’ve contributed to it, but there are a lot of amazing people at CFP Board who have worked very hard. The Board’s mission is to benefit the public, so everyone at some level or another is working to increase awareness and make the CFP® certification the recognized and highest standard of financial planning.

CFP Board has a public awareness campaign that’s in its fifth year, and it has focused on many of the messages that I, too, emphasize in my speaking engagements or media contacts, which is: what consumers need is holistic personal financial planning; it’s not just about investments; it’s not just a once-off kind of thing. 

The campaign has evolved in the last year or so to tell the story of CFP® certification as the high standard in financial planning, as well as the ethical requirements [of the CFP® certification]. Consumers need to understand exactly what the designation means and what it promises. Unfortunately, people often just choose the letters without having any awareness, or they don’t even ask for letters. 

We have seen recognition, or what marketing people like to call “unaided awareness,” of the CFP® certification tick up significantly in the last couple of years among the primary demographic target for financial planning services. It’s increased from 24 percent in 2013 to 30 percent, according to the last measure in 2014—nearly double the 17 percent it was in 2011.

4. What role do you think CFP® professionals should play in educating consumers about the financial planning process?

I think CFP® professionals are very aware of the idea that an educated consumer is the best consumer. You can really make a difference when consumers are well-educated. 

Let’s just take investments. Research has been done that shows that the more education a client has about financial markets, capital markets, and investment options and how they work, the less risk-averse they are. We’re in the business of helping—not to eliminate financial uncertainty, but to work with it and manage it. So to the extent that a consumer comes in and understands the process and the basics of investing or taxes or whatever, we get real results. It’s when you have someone who is so emotion-bound—by fear or greed—that it becomes very, very difficult.

Education is the great equalizer, even between women and men. For example, the more education women receive, the more risk-tolerant they become. Of course, you don’t want to be risk-seeking, but if you can tolerate it, there’s real progress to be made. It’s also been shown that more education men receive about investing, the less risk-seeking they are. 

I think CFP® professionals intuitively, if not explicitly, know that education is very important. It’s important that consumers understand the connection between doing financial planning and having a healthier financial life. We have to educate our clients about the benefits of financial planning, certainly, but also help them understand that it is a complicated and multidimensional practice. And that’s where having that education and competence really pays off.

5. One of your accomplishments serving as CFP Board’s consumer advocate is producing consumer guides, including the Consumer Guide to Financial Self-Defense, which teaches consumers the red flags to avoid financial fraud and abuse. This guide certainly benefits consumers, but does it also benefit the planning profession?

It’s interesting, because when the guide was released, we got comments coming in, and there were one or two that were distressed that pointing these things out would be harmful to the profession. But overwhelmingly, we heard from professionals who appreciated the work that was done and felt it was really important.

And remember, this guide came out in the era of Madoff and Stanford; there were high-profile Ponzi schemes going on. I remember talking to my colleagues at the time, and we felt Madoff was really a problem, because suddenly a financial adviser of any ilk was being painted with that same brush. So the [intent of the] guide was to say, “Here are the bad things that people can do,” but also to lay down a template for consumers on “This is what you should expect”—in other words, the good behavior too. 

It was not in any way trying to say, this is an industry riddled with bad actors. It’s the story of: here’s what could happen, and how do you prevent that?

6. Another CFP Board consumer guide you have written, Financial Self-Defense for Seniors, deals with elder abuse. How widespread is elder abuse, and what role do planners themselves play in recognizing it and preventing it?

There’s no question that it is very widespread. Various sources quantify the abuse; it’s in billions annually in terms of cost to elders. And I think we’ve got a tip-of-the-iceberg problem with respect to elder abuse in that it is very under-reported, and you can think of all the reasons why that would be the case. There are elders who, for a variety of reasons—it could be cognitive impairment, it could be fear, it could be embarrassment—who do not report it.

There is a lot of elder abuse that is not at the hands of a financial professional. A lot of the abuse takes place by telephone scammers. A lot of abuse takes place at the hand of a family member. A lot of abuse takes place at the hand of organized criminals who make millions on fraudulent Medicare claims. It’s a big problem and a lot of things are lumped into it. 

I think any planner wants to help elders and their family members recognize when something is going on. That is an important role that planners play—they are in a position to recognize and prevent it. 

[CFP Board] did a research report on senior abuse based on what CFP® professionals had experienced in terms of individuals coming to them as a result of bad or criminal treatment by other professionals. Planners’ vantage on this is very immediate, because so often they’re the ones who are approached when something has happened at the hands of somebody else.

7. You have been involved in CFP Board Women’s Initiative, which is dedicated to increasing the number of women entering the financial planning profession. Why do you think more women do not enter the profession?

We did a research study and found eight observations of possible barriers and reasons why, but I think they can be summarized into two large buckets.

One is women’s or women students’ awareness of financial planning—what it is and what a financial planner does—is distinctly lower than the awareness among men. It’s a big knowledge gap. We can go on and say there are pipeline problems, but you can’t go toward a career if you don’t know that such a field exists. Awareness is simply not knowing, but there’s another component of awareness that has to do with not understanding the facts that they do know; not understanding that financial planning is very much about relationships and listening and communicating and so forth. So a major group of reasons pertain to the awareness and education component. There’s a discrepancy between what women know and learn about the career and what men know and learn. I’ll call that the educational bucket.

Then there’s what I’ll call the environmental bucket. And that has to do with the profession itself and how women are welcomed. Are they being welcomed into the profession? Are they being cultivated? Are they being supported? We found in a number of instances where this wasn’t happening. It can be as benign as this is a male-dominated profession. That, in and of itself, can be a deterrent for a woman.

Visualize a woman who’s trying to choose a group to go talk with or an educational seminar to join. She’s walking along a hallway, choosing which room to enter, and if it’s all men in there and she’s the first and only woman, I think that’s hard. But if she sees something that’s more diverse, she may be more attracted to it. It could be that basic, but I think our industry fails to understand that optic sometimes. They fail to realize that when women walk into a firm that’s highly male-dominated, that that alone can create the reaction: am I going to be heard?”

The research shows that when you are part of a group and your particular segment, gender, race, or whatever that’s fewer than 30 percent [of the group], the chances of you being heard are far lower.

But there’s also bias about who makes the best financial planners and what the good characteristics of a planner are. There are unconscious as well as conscious biases against women. For example, there’s an assumption that women are more apt to leave to have a family, whereas if you asked the women themselves—both within the financial planning profession and women students on their way to enter the profession—they don’t see it like that. And I think increasingly, we’re understanding that work-life issues are issues for young men, for millennials, just as much as they are for young women.

8. What career advice would you offer female planners in what is still a male-dominated profession?

No. 1, that financial planning is a great profession for women. If enough of us come to that conclusion, if we can get enough people attracted to and get enough women in the profession, it becomes not a vicious cycle. It’s male-dominated because it’s male-dominated. We can turn that around and begin to get more women. Finding more support—through networking, through mentorship, through talking to other women—is a really important step to take. 

We need to rise by lifting. We need to be helping other women in the profession. That advances our career, puts us in the position of leadership, and begins to build our role and brand within the industry. I think when you seek out other women, you learn from them. We’re much more apt to learn in a non-threatening environment. Understanding what other women have done, how they’ve met these challenges, is really important.

It think it’s also important to set your own standards and expectations. The profession offers such a range of business models and sizes of practices and focus. It’s going to take some work, but you have to find that space that you really love. CFP Board has created an online career center. It’s not a women’s initiative program, it’s to get talent where it needs to go, but one of my beliefs is that it will really help women understand the idea of career path.

9. In the preface of your book, Women’s Worth: Finding Your Financial Confidence, you tell the story of speaking to a group of highly educated, successful, and wealthy women, when you realized that as a group, they lacked the confidence to be financial decision-makers. What can financial planners do to help remedy this “female crisis of financial confidence?”

It’s really important to understand that, for many women, it’s a process of empowering, educating, and engaging.

Women may need empowerment that what they know—even what they don’t know—is okay. I can’t tell you how many times women will say, “I don’t understand that,” or “I don’t know anything about taxes,” or whatever, and the door closes. We can draw on all the things that they do know and empower them that they can do this; that they belong in the world of financial decision-making and that they have a lot to bring to it. 

Women are apt to see the whole investment process as very arcane and way too complicated, when in fact there’s a whole theory of investing that won a Nobel Prize that basically said, you don’t need to know anything; you can index. As far as I know, the battle over passive versus active has never been resolved. So it’s getting women empowered to think: “I don’t need to understand everything. And, in fact, that is almost counterproductive to taking control of my financial life.”

Then of course there is the education part and how important a role it is for financial planners to be educating their clients as well as advising them.

The engagement part has a lot to do with the way you’re working with your women clients and understanding where they’re coming from.

You do not have to know it all. Many women believe that we have got to be better and know more and be more perfect in order to compete, and that just creates a level of stress and burnout that just is not conducive to building a successful, sustainable career in any field.

10. Your book includes a chapter on retirement where you write how “retirement” is a concept that is changing, and that you favor a word such as “retiming” instead of retirement. Why is thinking differently about retirement particularly important for women? 

One thing I think we have failed to realize when it comes to looking at men and women in retirement is how profoundly different it is for women than men for the simple reason that, simply put, women are single in retirement and men are not. It’s an overgeneralization, and there are lots of exceptions to this, but if you look at men age 65 and beyond, throughout that retirement period, the majority of men in those age groups are married or partnered. So what does that mean? Retirement is a continuation of life as it has always been for them. The roles haven’t changed. It’s a culmination of a life already created. 

Whereas, for women, as you go through age 70s and into the 80s, the number of women who have partners or husbands drops off distinctly. Their life situation diverges. Think about that in financial terms. When women lose their spouses, it’s been shown that their financial situation generally declines. They may lose half their [household] income, but their expenses are not falling by 50 percent. There’s stress.

Being single versus being partnered is likely to be a financial drag. It’s probably more costly on a per-capita basis to be single than it is to be married or partnered. There are lots of other things as well, but just that simple financial fact alone and the huge implications of that, I think, have been ignored.

Carly Schulaka is editor of the Journal. Contact her HERE.

General Financial Planning Principles