Women must take charge of their finances

Aditi Kothari, Exec. Vice President at DSP BlackRock Investment Mangers spearheads the Winvestor initiative by DSP BlackRock Mutual Fund to inspire and empower women with financial knowledge, enabling them to become confident of taking their own financial decisions.In 2007 she completed her MBA from the Harvard Business School .

Aditi

Why is it important for women to be in charge of their financial future?

I would like to illustrate this point with an example: A few years ago, a young employee in our firm met with an untimely demise and left behind a grief stricken wife, the mother of his two children. Consequently she became the beneficiary of a sizeable life insurance claim and some company compensation money. Prying relatives and other kin were quick to spot the opportunity and offer to invest the money on her behalf. In her vulnerable state she may have even signed away her inheritance, had the DSP BlackRock team not intervened and guided her through a suitable investment plan, according to her particular risk tolerance level and future financial objectives.

I also came across other such incidents involving freshly divorced friends with a sizable alimony and some single friends who were earning a healthy income but did not have the confidence, interest or knowledge to make their own investment decisions.

What exactly is Winvestor?

Winvestor program is a financial awareness program for women to encourage them to find the confidence to make their own financial decisions. We believe that in order for women to be responsible for their personal financial futures they need to reach out to trusted financial advisors to help them. Simultaneously, they can try to educate themselves as much as they can from the internet or other introductory personal finance books.  

How are the priorities, aspirations, lifestyles and financial planning needs of women different from men ?

A woman’s expense priorities are rather different than that of a man’s, especially her husbands’. For example, a woman may want to spend on jewellery or bags and not feel it is very important to spend on upgrading the car! It is  that simple. An adult woman should be able to spend on whatever she wants even if she is not earning money. That is where investments can play an important part. Women today inherit money, they have savings from past jobs or they are given some money in their trousseau. If they educated themselves a little more about investing and were in touch themselves (independent of their spouses) with a financial advisor they would be confident in making all their financial decisions and would not feel dependent on or obligated to their partners or family members. They would be able to generate some income from their ‘corpuses’ (inheritance, past savings or trousseau money) and be well on their way to financial independence! I do believe a lot of marital stress can be alleviated if all women took charge of their own finances.

In other cases, women may also have to deal with unexpected and unfortunate events such as divorce and widowhood.

Which are the most basic questions/concerns that women have regarding finance?

Among women who attend Winvestor sessions, about 50 per cent said that they were not as confident and knowledgeable about financial matters as are men and were hence hesitant to make their own financial decisions. They said that they rely completely on their spouse, father, brother or other male members in their family.

According to a 2007 study on gender differences by Tahira Hira of Iowa State University and Cäzilia Loibl of Ohio State University, women are still less likely to be socialized in financial matters, find investment decisions stressful, difficult and time consuming. The study also found that it often takes a life event, like getting married, to prompt women to save and invest, whereas men were more likely to start investing gradually.The basic questions which most women ask are, “How do I make myself financially literate? How do I start investing and how do I know which products are right for me?”

What are some of the basic financial instruments a woman needs to know about?

Health insurance, life insurance (term plans), mutual funds and bank recurring deposits are some products that women in general should be aware of.

What has been the response to the financial literacy campaigns for underprivileged women?

We have organized a series of financial literacy campaigns in North India in collaboration with Sanchayan Society - a Delhi based NGO for underprivileged rural women dedicated exclusively to financial literacy for the youth and  adults.

These workshops spread awareness on concepts like inflation, investments, bank account savings; made women aware of concepts like NPS, Recurring deposits, FDs and Life Insurance among others. These programs were held in the local dialect and have been received very well.

Are there plans to conduct such campaigns in other metros?

Of course! Sanchayan does more work in North India, particularly in the Delhi NCR region. We are therefore keen to connect with other NGOs doing similar work in other regions in order to scale this initiative countrywide. Interested NGOs may get in touch with us at winvestor@dspblackrock.com.

What about rural areas where literacy is low?

We want to reach out to as many women as possible and again, are keen to engage with NGOs all across the country in rural and urban areas.