Meeting Female Investors Where They Are Now: In the Driver's Seat

Lorna Kapusta of Fidelity

Younger women are more confident about managing and investing their money than those of prior generations. The reason isn’t complicated.

“They’ve taken on a greater role in making money and determining how they want that money to fund their lives,” argues Lorna Kapusta, head of women and customer engagement at Fidelity Investments, in an interview with ThinkAdvisor. “Women have not always taken the front seat in these decisions, but that’s changing rapidly.”

In her role as an advocate and public speaker encouraging women to take a more active role in their finances, her aim is to inspire them to grow their money for the immediate future and long term by making it work for them.

“Sometimes I think of that as ‘making money while you sleep,’” says the marketing expert, who has been with Fidelity for seven years following executive posts at American Express and Primedia.

Just as younger women are taking greater control of their finances, more women are becoming financial advisors, she says. Only 31% of financial advisors are female, according to the Bureau of Labor Statistics.

To speed up the hiring pace, Kapusta suggests that, for clarification, firms make sure job postings clearly state a financial advisor’s responsibilities.

Being an advisor is “much more than just about the numbers,” she says. “It’s about connecting with people, understanding what they’re trying to achieve and helping them figure out how to achieve it.”

ThinkAdvisor recently held a phone interview with Kapusta, who was speaking from Boston, her base.

She has some advice for advisors about working with female clients: “First,” she says, “they need to realize that men and women approach money differently.”

For men, their “proudest money moment is getting that big win from investing,” Kapusta notes. “Women say it’s about how they’ve used their money to achieve a goal.”

Here are excerpts from our interview:

THINKADVISOR: Fidelity did a 2021 study that showed only 33% of women feel confident in their ability to make investment decisions, and just 14% said they know a lot about saving and investing. Your thoughts?

LORNA KAPUSTA: Over [the years], we’ve seen that women are less confident when it comes to investing. But that’s very much changing across generations. We’ve observed that change most with young women.

On average, the next generation of women — in the 18 to 35 range — is even starting to invest in a brokerage account that’s outside their workplace retirement plan.

We see retirement accounts now that women have started at age 20, whereas their older peers didn’t open that first workplace retirement account until they were 27, 30 or older.

Why have these women, and others, assumed more control of their money?

Because they’ve taken on a greater role in making money. They’re determining how they want that money to fund their lives. There’s an opportunity for them to have full control and make decisions to help them achieve what’s important to them.

Women have not always taken the front seat in these decisions, but that’s changing rapidly.

It’s about, “How is my money working hard to achieve what’s important to me by developing a plan for it to have the greatest [returns] potential?”

Sometimes I think of this as “making money while you sleep.”

What else has prompted the younger generation of women to take charge of their money?

They’re hearing from older generations, as well as social media and their male counterparts, that there are opportunities for them to make their money do more for them. That’s what we’re so focused on.

Meeting with a client couple, many financial advisors address the husband only. Then, with the husband’s death, the wife most often fires that advisor and gets a new one. Please comment.

Yes, in fact, seventy percent of women leave their advisor once they become a widow.

It’s important for advisors to know what’s important to [the wife], especially what her worries and goals are.