Among several demographic changes that characterize the coming decade is the increased number of Single Women with Assets—single households headed by a solo woman with investable assets of $100 000 or more. The proportion of these households has almost doubled since 1994; they currently represent 5% of all US households. Single-Women-with-Assets households include single (never-married), divorced, separated, and widowed household heads. Although widowed households represent about 40% of this population, roughly one-quarter of Single Women with Assets have never been married, and one-third are divorced. Single-Women-with-Assets households represent an opportunity for financial-services providers that take time to understand that these households have different priorities and concerns than others have.

Demographics

• The average age of Single Women with Assets is 65; slightly more than one-quarter are younger than age 55; two in five are not retired.
• Single Women with Assets' average income is $65K. Almost one in five (18%) have annual incomes of more than $100K.
• Only 58% live in a single-family home. Over one-third live in a condo, town home, or apartment, in comparison with 23% of single-men-with-assets households. They are less likely than other households to live in a large city or a rural area.
• One-quarter have children younger than age 6 in the household; 7% have Boomerang kids—adult children who have returned home.

Products and Services and Financials

• Single Women with Assets are conservative and risk averse. More than all households and more than their male counterparts, they own savings accounts, CDs, US Savings Bonds, and money market deposit accounts.
• They have the highest amount of home equity of all households, the highest amount of equity in other real estate, and the lowest amount of total liabilities.
• Roughly one-half of Single Women with Assets exert most or total control over their savings and investments instead of sharing it with a financial professional.
• Slightly more than one-third of Single Women with Assets own annuities, and they average more in their annuities than do single-men investors.
• About two in five have either a packaged relationship or an investment-management account; over half have a stockbrokerage account.
• Two-thirds have any life insurance.
• More than any other population of single-headed households, Single Women with Assets prefer credit unions, community or local banks, and financial-planning companies.
• Single Women with Assets trust banks and credit unions more than other types of financial institutions. Accountants, CPAs, certified financial planners, and lawyers are the most trusted financial professionals; almost two-thirds of Single Women with Assets are more likely to trust the advice of a financial professional who is paid a fee than one who is paid a commission.

Retirement

• Three in five Single Women with Assets are retired.
• Regarding retirement, they focus on managing assets (39%), living within a fixed income (36%), and health issues (36%).
• The majority have critical documents such as a will, a living will, and a medical power of attorney in place, as well as an executor for their estate.

Financial Planning and Advice

• Single Women with Assets are not easy to please. They place equal importance on ability, experience, and performance when selecting a financial professional.
• Three-quarters of Single Women with Assets prefer to do business in person, preferably with a well-known individual. Because many (43%) "feel stupid when asking questions about financial matters," a personal relationship mitigates feelings of discomfort.
• Face-to-face conversation is important to the majority. Seven in ten report that using their financial advisor as a sounding board is important; almost nine in ten prefer to discuss options before making a financial decision.
• Three-quarters are unlikely to try a new financial service unless someone they know recommends it.

Financial Attitudes That Differentiate Single Women with Assets

Single Women with Assets are much less likely than single men with assets to:

• Borrow against the equity in their home
• Borrow from their retirement plan
• Worry about getting a loan if they need one
• Prefer to buy something on credit than save for it
• Spend most of their wealth before they die
• Feel comfortable doing business over the internet
• Consider themselves to be sophisticated investors.

Implications

As we reported in April 2012, the number of Singletons is increasing. Growth is likely at both ends of the spectrum—older and younger single-headed households with investable assets of $100K or more; retiring single Boomers with assets and Millennials who are building assets. Although retiring Boomers may have existing financial relationships, distrust of financial institutions caused by the 2008 recession means that some relationships could be in transition. The growing number of women with postgraduate degrees and the many women who are delaying marriage suggest that the proportion of younger Single Women with Assets may increase in the coming decade faster than that of single men with assets. Although women investors share some characteristics, such as lower risk tolerance, other characteristics such as a preference for face-to-face interactions will likely change for young, single women, Nevertheless, the desire for the personal touch—for interactive communication with a dedicated advisor when investing, for example—may not change.

For more information, contact CFD.