Building Women’s Financial Health: Award-Winning Wealth Advisor Karen Altfest


I think it’s because of the way I was raised.
I was the youngest of three children. I had an older brother. He was taught by my father
about business, about real estate, about finance. I didn’t realize that till I was older. They used to go out together every Sunday
and they’d say they were out for a drive but my father was teaching my brother about business
and these were things that I as a young adult took on myself to learn. And I sort of imagine
that the women I knew and grew up with in a different city in a different place are
probably still like that and letting their husbands do it, their sons do it, their brothers
do it. It may not be true for all the women but it’s it’s an impression I have and that
I’d like to work against. You were a history major. I was. I have a PHD in history I was an education
major at McGill and then a history major in graduate school. When did you get into finance? I got into finance after getting my PHD. I
taught for one year and then I was asked by Pace University to create a program for people
who wanted to be certified financial planners and I had to find the students, I had to find
the teachers, I had to create the courses. And I thought this is really interesting.
And little by little I became wooed by the profession and joined it myself. And when did you start focusing your practice
on women specifically? When I think about it I mean how many women certainly on their
own accord would go to a financial planner until maybe very recently, if? And so was
it normally through their husbands would come and seek your financial advice and then you..
Oh by the way this is my wife? Very often the husband showed up with the
wife and the husbands were very much in charge. My focus was always on the women. I would
work with men as I still do now. If they’re the client and they have the need that’s fine
but I prefer to work with women because I feel there’s so much that I could do. So that’s interesting. And how do you navigate
if the husband comes in who basically is kind of in charge? How do you get to the point
where you can actually talk to the wife alone or the spouse or their significant other alone?
Is that a negotiation that you have to have? Well yeah I always ask before the couple come
in if the wife is coming too and would he try to bring her in. So in at least 80 percent
of the cases the husband shows up with the wife and the wife may not be interested, she
may be very interested, it really just depends. What are the kinds of issues that women want
to talk about that men don’t? Well there are two things. One is the way
in which women want to talk and one is what they want to talk about. For example the other
day I had a call from one of my clients who can afford any wardrobe she wants. And she
said she was in a dress shop, was it OK if she spent a certain amount. She was going
to a special event and she could and she said, “Well I’m going to tell my husband that you
said, Karen said that I could buy this dress.” And she really could buy this dress and she
could buy one of those a week. But she doesn’t think that of herself. So sometimes it’s you
know how they feel about something their perception of reality. And sometimes it’s about their
just wanting your attention, wanting to know that they’ll be OK, they’re not going to live
in Central Park. I’ve actually never heard a man say that you know. So the bag lady syndrome is alive and well?
Among women? In certain groups it is, among women it is.
And people will say that and they could be at any level of money Where does that come from? And is that still
prevalent with younger clients for instance, is that still something that younger women
think about? I think it’s a, you know, a fear, a leftover
fear, of people that I won’t be OK, I won’t have a place to live, I won’t have enough
to eat, I didn’t do enough to prepare for these days. I’m not going to be OK. I don’t
think – I’ve never heard young women say, “I’m going to live in a park,” but they’re
not so much better educated about their finances than older women. So that’s interesting, you’re finding that
the younger women are not much better educated about their finances They may have better jobs. They may be waiting
longer to get married and have families and they may seem very independent. And when it
comes down to money they may not be prepared. I was asked by a group of female students
at Yale University to come and speak to them because they said they could not graduate
until they knew something about finance. And I was really very moved that they had called
me instead of a professor or instead of an organization. The girls themselves, these
lovely young women reached out to me and I just couldn’t say no to that. It was a wonderful
evening. I bet it was. And you know lucky them. But
what’s sad is that they’re graduating from Yale University, an Ivy League college, with
no grounding in finance I thought I thought at least that there would have been some progress
made in the educational establishments. But I guess they’re not. Well I have heard very discouraging numbers
that the U.S. is 14th in the world in financial literacy and we should be doing better than
that. So what is your approach with women in general
and how does it differ from that with men? Well the approach with women is to communicate
well, to listen well. we have an annual meeting every June and at the end we have speakers
and at the end we have a lot of questions and 80 percent or more of the questions come
from men and they’re very good questions. But when I have women’s sessions 100 percent
of the questions come from women and they’re excellent questions. The stereotype that I’ve always had of the
interactions that financial advisers have with men versus women is that men want to
get right to the investment portfolio and how am I doing and you know how am I doing
versus my benchmark. And whereas women tend not to care as much about the numbers but
they care more about lifestyle, you know what can I afford. And also financial security
is. Are those accurate stereotypes? Financial needs are the same for everybody
– everybody wants shelter, everybody wants food, everybody wants warm clothing, wants
to educate their kids and then once you get beyond that you want the night at the opera.
You want a vacation. I think the needs are the same. I think the way they’re perceived
could be very very different. I think emotional impact causes you to feel differently or less
secure, or the way you’ve been treated in the business world or in your family. It’s
very important to go back and say, “Who handled the money in your family?” Things like that.
As you get to know people a little better. There are some people now who are approaching
money, how you feel about money, how important that is, what, as you just said, what your
background, your experience with money is. Is that something that you find it’s important
to delve into with women especially, or both men and women? Both men and women. I like to ask about it.
You know they say married couples argue more about money than anything else but it’s because
they’re from different families and people handled the money differently. So you know
she may be expecting the gold bracelet for Christmas, he might think it’s nice to write
the poem to her for Christmas. But they have very different backgrounds and different expectations
and that explains a lot and helps you get to know who’s sitting in front of you. Value based investing, so socially responsible
investing, again I’ve heard that women and millennials for instance are much more interested
in socially responsible investing than than men are traditionally. Are you finding that
in your practice as well? Yes we are finding that more women are asking
for socially responsible investing and we do have a portfolio of socially responsible.
Now most people want part of their portfolio invested that way. Not all of it which I would
second. I think that’s a great idea. But we have that conversation much more frequently
with our women clients. And why do you think that’s a good idea? Why
wouldn’t socially responsible investing be a core part of the portfolio as opposed to
..? I think it could be a core part. I don’t think
it should be the whole part. I believe in a very diversified portfolio and I would say
that about a lot of other investment types. What questions should women ask of their financial
adviser? What are the kinds of issues again that women should be thinking about that maybe
men aren’t? I think women should be looking at the totality
of their financial lives. They shouldn’t be waiting until their husband is gone to find
out who their broker is, who their lawyer is, where their money is, all these things.
They should sort of be doing a check on their money every year or so, be up to date knowing
about it. So many women will come in and say well you know I don’t know if I signed my
will, I don’t know if I have beneficiaries, I don’t know if I have insurance or what it
covers. And it’s something they should know. But they should know the totality of their
life and how doing one thing impacts on the other parts of their financial life and not
look at everything as an isolated event. I would love to give women the confidence to
make good choices for themselves. one of your sub specialties and in addition
to focusing on women with their financial planning are widows. Tell us about your interest
in widows number one and what are the kinds of topics that you talk about when you’re
talking with widows in particular? I think that widows are at a very emotional
stage in their lives. It’s a terrible tragedy if somebody’s husband dies very young – I
have widows in their 30s, I have widows in their 80s, and it’s very very hard. They’re
at a new place, a new transition time and they can be very fearful, they could be very
vulnerable. And they may be getting bad advice from their friends and relatives who mean
very well but are saying, “Aren’t you going to get off the couch? Aren’t you going to
Europe with us? Aren’t you going to dinner with us? And when are you getting back to
work?” And on the other hand they have a group of people saying, “I read in the paper you’re
not supposed to do anything for a year.” Right. Don’t change anything for a year. I’ve
certainly heard that. Well both are extremes because you know you
want to use your phone, you want your lights on, if you have young children you want them
to go to school. You’re not going to say to them, “Well you won’t go the next year because
I don’t feel up to it.” So you have to still manage to do a lot. And yet you want to put
off the bigger changes in your life. Because I’ve known women for whom that hasn’t worked
out. I know a woman whose husband died in their vacation home and she could never go
there again. And she sold it and she’s regretted it for over 10 years now. I hear about this
all the time. And I understand. And she should have asked her children or, you know, seen
if that was the right choice for her. And I’ve known people who’ve sold their New York
apartment and moved to another state that they hadn’t even been to and immediately wanted
to come back. But there was no apartment to come back to. And so yes it’s better not to
rush those decisions. And so those are the kinds of things we talk about. You know I
mean it’s not for me to say, “You should go to Maine, you should go to New Hampshire,
you shouldn’t go to California,” but rather,”What would you like to do? What would you feel
comfortable?” and sometimes to guide a person. So it sounds like you’re playing not only
the role of a financial planner but it’s also kind of part therapist, friend, adviser and
especially in the vulnerability stage which widows are in and so it is that as important
as helping them, guiding them with their financial lives? Well I think to encourage them to have the
confidence that things will work out and that they will and they will make decisions that
suit them and they will come out of it OK. You know it struck me what you were just saying
about how dependent women still seem to be on their men and on the the financial wherewithal
of their partners versus their own financial wherewithal. Are you dealing with women who
are basically the major breadwinners or who are single or divorced And are their needs
different than than those of the spouse of a successful man? Yes I mean we we do deal with women who are
on their own and so they’re handling money. They’re out now. The average woman may spend
something like 20 years either before she’s married or after she’s married handling her
money. But a woman who’s single and independent would have been doing much more of that all
those years. You hope We hope so. I think there’s a very very wide
range. We do have some women who are top executives at top corporations and their husbands are
stay at home husbands. They’re still in charge of the money usually. The men are? Interesting. Because the woman doesn’t have time, is the
most given reason. And so you do see women at all ends of the spectrum of course. The
majority of women we see are in traditional relationships meaning that the guy will make
most of those decisions. I’m just thinking that the women’s needs as
far as I think – you mentioned that a lot of the needs are the same. But the fact is
that women live longer than men. And I think there’s some statistic that a married woman
is the likelihood is that she will be alone one way or the other for at least the last
eight years of her life. So is that the longevity risk is that an issue again that you have
to address separately and that you have to give different financial advice have different
financial plans for women than you do for men? Well yes and no because that’s very important.
Women very often do outlive their husbands. And so for a lot of people that could be into
their 80s, could be into their 90s. So but we like to look at everybody’s longevity until
their 90s anyway. And some people won’t get there. But it’s you know a conservative approach
to financial planning. Will you be OK until you’re 95 or something? And for most clients
that will be long enough although we do have somebody who just had his ninety ninth birthday.
But for most people that that’s long enough. And so while if we’re planning for both spouses
to each live to 95 I think we’re gonna have that pretty well covered for most people. Are you finding that more women wish to get
involved in these discussions that they’re interested in actually a more granular approach
to financial planning than they might have been traditionally. I think a lot of women are happy that somebody
else is doing it and they don’t have to do it. I think there are some women who today,
even in the Me Too movement are saying, “Look if a woman could go out there and say publicly
this or that happened to her I could know about my finances.” So you know just take care of yourself create
your own plan don’t wait for Prince Charming. I think too many women do that. Don’t wait
for the lottery. Make your own plan and you’ll get where you want to be. That’s great advice to leave this conversation.
So thank you Karen Altfest very much for joining us. You’re very welcome.

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