This article is contributed to us by Jacquelyn Tan, Head of Group Personal Financial Services at UOB.
Women today are leading multi-faceted lives and enjoying more financial independence as they earn, save and invest more than previous generations. Yet they may not be focusing on their financial health as they remain the primary care-giver in most homes in Singapore and prioritise the well-being of those around them.
A 2017 UOB-Prudential survey found that 37 per cent of women in Singapore put their needs of their loved ones before themselves. Among married women, this figure went up to 52 per cent.
The UOB data also showed that women who have investment and insurance holdings tend to save more. For these customers, their average deposits balances are more than three times that of female customers who only hold deposit products. It is therefore important that financial solutions are designed to enable women to grow their investment, insurance and savings efficiently and effectively.
In order to create financial solutions for women, we must first understand their unique needs and concerns. According to a RFi Group report, the personal financial behaviours of women and men differ starkly. For example, women tend to track what they spend and save on, while men are more focused on their investment portfolios.
The Ministry of Social and Family Development (MSF) has dedicated 2021 as the year of celebrating Singapore women. This is a timely reminder for women to take charge of their financial well-being. Here are six ways they can do so.
#1 Plan For The Long-Term
In Singapore, women are expected to live longer than men. According to the Singapore Department of Statistics, women’s average life expectancy at birth has now grown to 85.7 years, outpacing men at 81.4 years.
Women must keep in mind that they could be living longer than they expect. They will need to build up a robust nest egg to enjoy their silver years without anxiety arising from financial difficulties.
This involves evaluating their needs in their multi-faceted roles and seeking out gender-responsive financial solutions that not only keep up with the times but also help them to meet their retirement and long-term financial goals.
#2 Build Financial Literacy
A good foothold in financial literacy will also enable women to make confident decisions about their finances and investments.
For example, women generally hold more cash than men with capital preservation in mind. In a low-interest rate environment, it is especially important to adjust your financial strategy to keep up with inflation and continue to steer capital gains.
Women can work together with their client advisors to unpack the risks and costs of holding too much cash in one’s portfolio. A good advisor would be able to communicate effectively to address the needs of female investors, understand their investment goals and long-term returns objectives, and encourage them to get comfortable with active investing to address their needs and priorities.
To gain more knowledge on how to confidently manage their finances, women can also make use of digital tools and educational platforms dedicated to helping investors understand how to invest as well as increase their financial literacy.
#3 Tap Technology To Stay On Top Of Their Finances
Using AI and data analytics, keeping track of finances through mobile banking apps is a breeze.
Women can now receive personalised insights based on their individual transaction data, which can prompt them to save and to spend more wisely and suggest relevant ways to make their money work harder for them.
Over the past year, there is growing interest among female UOB customers for insights that inform them on their spending habits on our app, UOB Mighty. This not only helps them to stay on top of their finances but also prompts them on deals to help them stretch their spending dollar.
#4 Grow Wealth The Smart Way
While women account for almost two-thirds of all UOB customers who regularly invest over the last three years, UOB research showed that women tend to neglect personalised investment tracking and advice as compared to men.
Those who do not have the luxury of time to build up their investment and financial planning knowledge should consider using digital portfolio management tools to grow their wealth the smart way.
For instance, digital investment platforms, such as UOB Portfolio Advisory Tools and UOB Portfolio Explorer, enable client advisors to provide investors with insights on their portfolio performance, assess their risk thresholds, and simulate how their holdings will perform under different market scenarios.
#5 Seek Targeted Protection For Their Healthcare Needs
UOB research revealed that more than one in four women are still not sufficiently protecting their savings with insurance against critical illnesses as they prioritise the needs of their loved ones over their own. This is especially critical given that one in every four to five women in Singapore may develop cancer in their lifetime, according to the National Cancer Centre Singapore.
Cancer and critical illness treatment can take a dip into one’s savings, and women need to seek financial solutions that will support them in the event of an unexpected illness.
In response, UOB created the UOB Lady’s Savings Account, the first in Singapore to offer women interest on their savings with free female cancer coverage for six female cancers of up to S$200,000 sum assured. This has been well-received as the number of UOB Lady’s Savings Account holders has doubled as at the end of last year since its launch in March 2020.
This is an important area that all financial services providers need to look into to support Singaporean women through life’s challenges.
#6 Invest In What Matters Most
UOB female customers who are millennials are investing more than the men in their age group, with about 17 per cent more millennial women investing in products such as unit trusts compared with millennial men.
Women also tend to invest in causes and issues with social impact, according to Barbara Stewart, CFA and researcher. The Harvard Business Review has also pointed to the willingness of women to take “social” risks in consideration of societal benefits rather than purely financial ones.
With the recent surge in interest and awareness around ESG (environmental, social and governance) investing, more financial services providers are looking at offering opportunities for women to invest in causes close to their hearts.
At UOB, we have integrated ESG considerations in our full suite of investment solutions and launched ESG-focused products for our wealth customers in 2020. Steering our customers’ wealth towards sustainable investments is an ongoing initiative that we will continue to pursue over the long term.
In short, women must understand their individual needs and priorities to make smart investment decisions that will help them achieve financial independence. By working with experts and leveraging digital tools that provide progressive solutions, they can stay on course to securing their desired financial future.
The author, Jacquelyn Tan, is the Head of Group Personal Financial Services at UOB. She has more than 20 years of experience in the finance industry.
