Pew finds 40% of households with kids under 18 have mothers as either sole or primary breadwinner.
Moms are controlling the wallet in households with children, presenting planning opportunities — and challenges — for financial advisers.
An analysis of 2011 U.S. Census Bureau data by Pew Research Center found that 40% of all households with children under 18 include mothers who are either the sole or primary breadwinner, up from 11% in 1960. There were two kinds of “working moms”: 5.1 million (37%) were married and earned more than their husband, while 8.6 million (63%) were single moms.
Further, married moms also were more educated than their spouse, with 22.7% of these women obtaining a higher level of education than their husband, up from 6.8% in 1960. About half of all women who out-earn their husband have at least a college degree.
This group of professional, educated moms is emerging not just across the country but in advisers' offices, too.
“I primarily attract women who want to take the lead in their finances,” said adviser Cathy Curtis of Curtis Financial Planning. “Many times, they're not the sole breadwinner, but they're the major breadwinner and make substantially more than their husband.”
“We've definitely seen breadwinner women for a number of years,” said Lisa A.K. Kirchenbauer, president of Omega Wealth Management LLC. “They're concerned about planning for the future, and they're focused on the kids' college education. Will they have enough money in retirement?”
In practice, advisers noted that breadwinner wives and mothers have a different approach to financial advice. Ms. Kirchenbauer explained that with married couples, one spouse will hold the reins on financial planning, and women tend to be the ones who take the lead on coming into the office for planning work.
Naturally, generating those relationships with breadwinner moms requires a different approach that leans heavily on building networks within their professional and social circles.
“Referrals are the best way to bring in new clients: Try to understand where women network and how they do it,” said Sharon Appelman, director of financial planning and investment management at Francis Financial Inc. Working moms not only have their professional colleagues but also the other moms with whom they interact at their children's schools.
“If you have children, the school is a great place. I've had some great networking in my children's preschool,” Ms. Appelman said “Let the other mothers know what you do and that you're available to them and their friends.”
Ms. Kirchenbauer agrees. She noted that other working women and referrals are the best way to tap into the network of breadwinner moms. “People have colleagues who need help but don't have the time … 'I know you have a lot of balls in the air, but let's help leverage your time as a busy professional woman,'” she said.
To get her name out locally, Emilie Goldman, a mom and an adviser with Tamarind Financial Planning, is active in three different mothers' clubs and participates regularly on their Internet message boards.
“I'm always looking for people who are asking questions and interacting in my topics,” she said. “It's helpful to me because I get a nice cross section of what moms are focused about and what they're trying to solve in their own lives.” Moms tend to be more interested in cash management and planning rather than investment returns, she added.
Participating in fundraisers and giving free planning sessions also provides Ms. Goldman some visibility at her kids' school and in the area, but she noted that most of her new business comes from referrals and Internet searches.
“I'm so specific about working with families,” she said. “You have to be targeted on [working moms'] issues, and this needs to permeate through your practice and client process.”
Indeed, working with breadwinner moms can bring its share of emotional difficulties. Ms. Kirchenbauer noted that in situations where the wife out-earns the husband to a large degree, the husband might feel down about his own self-worth. On the other hand, breadwinners might also feel that if they've earned the money, they ought to call the shots on all of the financial decisions.
“We've had to navigate through some emotional issues on this,” Ms. Kirchenbauer said. “You need to be sensitive to that.”
