How Financial Advisors Can Help Women In Business – Forbes Advisor – Technologist

Women in business often face unique financial challenges that complicate their professional and personal finances. Persistent gender pay gaps, disparities in access to business funding, longer life expectancies and higher healthcare costs are just a few factors that can make financial planning more complex.

Navigating all these challenges can require a comprehensive approach to financial management, including tailored investing, early retirement planning, expert tax advice and robust contingency strategies for whatever life may throw at you. With women’s labor force participation reaching new highs and a projected $30 trillion wealth transfer to women by the decade’s end, it has never been more important to have a strong financial plan in place.

Financial advisors can offer valuable support and guidance in this process, providing personalized strategies to help you maximize your financial potential. Here are some key areas where working with a financial advisor can be particularly beneficial for women in business.

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Investment Strategies

Success in the business world can often come with increased wealth and the opportunity to invest your hard-earned money. Sixty-seven percent of women are actively investing outside of their retirement accounts, a notable increase from previous years, according to survey data from Fidelity.

However, a few common barriers still keep some women from participating in the investment market. Only 33% of women report feeling confident about investing, and 69% wish they had started earlier.

Financial advisors can help demystify the investment process and provide tailored advice based on your specific financial objectives. This might include:

• Evaluating your risk tolerance to create an investment portfolio that balances your risk preference with long-term goals.
• Offering guidance on diversifying investments across various asset classes, sectors and geographies to help reduce risk and increase opportunities for stable growth.
• Developing long-term strategies tailored for consistent returns while taking into account women’s longer life expectancy.
• Regularly reviewing and adjusting portfolios to align with market trends and adapt to your evolving personal circumstances.

Beyond just guidance, studies show advisors can significantly improve investment outcomes. An analysis from Vanguard found that investors who worked with advisors saw an average net return 3% higher than those who didn’t. Working with an experienced professional can give you a sense of confidence and peace of mind, knowing that your investment strategy is being guided by expert insights.

Retirement and Estate Planning

Planning for retirement and managing an estate can be particularly complex for women due to longer life expectancies, lifetime healthcare expenses that are a third higher than those of men and any potential lost earning opportunities due to career breaks.

Financial advisors can work with you to create a personalized retirement plan that includes diverse income streams such as 401(k)s, IRAs, Social Security benefits, pensions and personal savings. They can also assist with:

• Maximizing Social Security and pension benefits based on your work history, retirement age and spousal benefits.
• Planning for rising long-term care expenses through insurance or other strategies to protect your retirement savings.

Estate planning can be equally important as it determines what happens to your assets after you die. Some advisors can help you:

• Create wills and trusts to ensure your assets are protected and distributed to chosen beneficiaries.
• Minimize taxes through proper estate planning to preserve more of your assets for future generations.
• Plan charitable giving to maximize your philanthropic impact.

Career Transitions

Career transitions are becoming increasingly common due to several factors, including longer working lives, job market uncertainty and rapid technological advancements. A study by McKinsey predicts up to 12 million occupational shifts by 2030, with women being 1.5 times more likely than men to require job transitions.

Whether you’re switching industries, getting a promotion or re-entering the workforce, career transitions usually involve significant financial changes that call for careful planning. Financial advisors can help navigate these changes by providing guidance on:

• Negotiation support: With women earning about 84% of what their male counterparts make, advisors can help analyze your entire compensation package—including salary, benefits and bonuses.
• 401(k) rollovers: Advisors will help you decide whether to roll over old 401(k) balances into new plans or IRAs to avoid penalties and unnecessary tax hits.
• Budgeting for changes: Advisors can assist with budgeting for job changes, helping ensure you maintain a proper emergency fund for any unforeseen expenses.
• Insurance coverage: After reviewing your new policies, advisors can recommend adjustments to make sure you’re protected.

Tax Planning

As you progress in your career, your income and tax situation may become more complex. Working with a financial advisor can help you navigate the ever-changing tax laws and find ways to minimize your overall tax burden. Some areas where advisors can provide helpful insights include:

• Tax credits and deductions: Advisors can identify tax credits and deductions for which you may be eligible. This might include educational expenses, business-related costs or home office deductions if you’re self-employed.
• Tax-efficient investments: Financial advisors can help you optimize tax-advantaged accounts such as IRAs and 401(k)s and use strategies like year-end tax-loss harvesting, an investing strategy to reduce taxable income.
• Charitable contributions: Advisors can help you make tax-efficient charitable contributions that can potentially maximize your benefits while supporting the causes you care about.

Consider seeking advice from a qualified financial advisor specializing in tax planning, such as a Chartered Financial Analyst (CFA) or Certified Financial Planner (CFP®). Companies like Datalign provide access to an extensive network of vetted advisors and can recommend a suitable advisor who can help you navigate complex tax laws and make informed decisions about your financial future.

Starting a Business

Starting a business can involve many crucial financial decisions, from choosing the right structure and managing cash flow to securing funding—where financial missteps can be costly.

Financial advisors can work with you to:

• Determine the best business structure to minimize tax implications and protect your personal assets.
• Create a financial plan to help manage cash flow and make strategic investments.
• Establish a retirement plan for yourself and your employees.
• Identify funding options, such as loans, investors or grants, and evaluate their potential impact on your business.
• Secure the right types of insurance to protect your business and its assets.
• Develop an exit strategy for when you’re ready to sell, retire or transfer company ownership.

Searching for the right financial advisor can detract from essential day-to-day operations. Datalign’s online platform can simplify this process with its personal questionnaire and AI-matching algorithm to quickly connect you with a vetted financial advisor suited to your specific needs.

Access to thousands of financial advisors.

Expertise ranging from retirement to estate planning.

Match with a pre-screened financial advisor that is right for you.

Answer 20 questions and get matched today.

Connect with your match for a free, no-obligation call.

Should a Financial Advisor Be Part of Your Plan?

Deciding whether to work with a financial advisor depends on your individual needs and goals. If you have any concerns or questions, it may be worth considering bringing on a financial advisor to help guide you through the process. But keep in mind that working with a financial advisor is an investment and should be carefully considered.

Here are some key things to look for when choosing an advisor:

• References and reviews: Look for client testimonials, ask for references and verify the advisor’s background using the SEC’s Investment Adviser Public Disclosure website.
• Credentials and certifications: Seek out advisors with relevant qualifications such as CFP®, CFA, PFS, ChFC or CIC.
• Experience and specialization: Look for an advisor with experience in your specific industry or expertise in areas that align with your needs.
• Fee structure: Understand their fee model—whether it’s fee-only, fee-based, commission-based or a combination.
• Communication and compatibility: Make sure you feel comfortable communicating with the advisor and that they can effectively address your needs.

Datalign’s AI-enhanced platform can help take a lot of the work in finding the right advisor for you by quickly connecting you with a pre-screened financial advisor tailored to your unique needs and goals. You can then schedule a complimentary introductory meeting with your matched advisor to see if they’re a good fit.