Ask Melanie
PUBLISHED : Monday, 04 March, 2013, 12:00am
UPDATED : Monday, 04 March, 2013, 4:18am

How is financial planning different for women?

Melanie Nutbeam, a certified financial planner based in Hong Kong, addresses common personal finance queries. Send your questions to


Melanie Nutbeam is an award-winning financial planning professional based in Hong Kong. She is a Certified Financial Planner TM (Australia) and has diplomas in finance, investment and law. She is also Vice-Chair of the Australian Chamber of Commerce in Hong Kong and Macau. She can be reached at

How is financial planning different for women?

Women generally earn less than men, earn over shorter periods, and live longer. This means they face greater challenges accumulating the wealth needed for financial security throughout retirement.

Women face universal disadvantages in terms of lower pay and gender-stereotyping of jobs. Age, education and cultural disparity also affect their income.

Timed for International Women's Day on Friday, the Civic Exchange has issued three reports profiling women from 15 to 60 years.

The report notes that free, compulsory schooling for women only came to Hong Kong in the 1970s. Education, particularly at the tertiary level, is a huge predictor of financial success. The substandard wealth of Hong Kong women over 60 reflects the low priority given to education in previous decades.

Women in the older age groups still earn about 30 per cent less than men and hold fewer senior positions in the private, public and academic sectors. Income differentials between twenty- and thirty-something men and women decline but do not disappear, perhaps as a result of gender-driven occupational variances.

Both twenty-something men and women are now better educated than previous generations but will nevertheless face greater career turbulence than their parents ever did.

While women have largely caught up with men in Hong Kong on education, they face the perennial problem of balancing paid work with family commitments. Women commonly put their careers on hold to care for newborns and, increasingly, their ageing parents. Expecting such interruptions, women are less inclined than men to choose careers with well-defined career ladders, which helps explain why they still earn less than men.

A comprehensive report released in 2008 by Australia's Financial Literacy Foundation called "Women Understanding Money" likewise blamed interrupted careers for women's lower earnings in Australia.

The report also found gender differences in money planning. It noted that women tended to be more conservative when investing which, in my experience, usually is more about women's inexperience with finance than an inherent sense of conservatism.

Generally, because women earn less than men, they have less to invest. This gap is amplified by the power of compounded returns on their investments. Men invest more and reap greater returns than women on a compounded basis through the years.

All of which highlights the importance for women to get involved in financial planning. Women need to be aware of the pitfalls posed by their gender and opportunities they could be overlooking.

Reading the findings of at least the reports mentioned above is a good starting point.


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