for RICHER & for POORER - Statistical Data Included

American Demographics,  July, 2000  

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Among married households, women's financial prowess is on the rise. Are marketers ready?

Sherilynn Lerner and Mike Jones have shared a lot together in the 13 years they've been married: a life, a house, a son. But there's still one thing the couple from Hunterdon County, New Jersey keeps separate. The dual-income lawyers maintain three different bank accounts: his, hers, and ours. And, Lerner is in charge of them all, even her husband's private account. "I keep my own account for my security," she says. "Our joint account is for the day-to-day bills. And Mike's account is to teach him how to manage money, which after 13 years he still hasn't mastered. I'm compulsive about paying our bills, and I don't want anything to destroy our credit. Plus, I certainly didn't want to be one of those women who didn't even know what a checkbook was."

Those women - whose connection to finance is limited to clipping coupons and paying the milkman - are becoming as scarce as, well, milkmen. The female half, once limited to such weighty matters as grocery spending, is now an equal partner in long-term financial decisions such as mortgages, investments, and estate planning. Today, women have an equal financial say in 75 percent of all U.S. households. It is a transformation that has occurred gradually in the home, against the backdrop of a much larger cultural debate about the workplace and glass ceilings. Yet, this shift is just as consequential, especially for marketers with an eye toward married consumers. As the role of women in society continues to widen, this issue is sure to transform the marketing landscape. "It's a real paradigm shift," says Don Taylor, president of FISI Madison Financial, a bank consulting firm in Nashville, Tennessee. "Thanks to an increase in dual-income households, women are more financially savvy customers today."

Women also have greater buying power. For those targeting tomorrow's couples, the message is clear: Ignore the female half at your own peril. A 1999 SRI Consulting survey, which polled 3,800 households, revealed that four in 10 homes are managed by women. Men, meanwhile, were solely responsible for financial decisions in less than 30 percent of all households. Moreover, a 1996 General Social Survey conducted every other year by the National Opinion Research Center at the University of Chicago, found a role reversal of sorts: the wife manages all the money for 28 percent of married couples (except for the husband's personal spending money). Another 37 percent of couples pool their money, giving the women at least some say. "Most married couples today aren't using Ozzie and Harriet as their role models," says Larry Cohen, director of SRI Consulting's Consumer Financial Decisions Group, in Princeton, New Jersey.

The shift inside the home reflects the rising power of women within society in general. Over the last half-century, the number of women in the workplace has tripled. As a result, the real median income of married-couple families increased by a whopping 150 percent, according to the US Census Bureau. Between 1970 and 1998, median incomes for women increased by 63 percent, but decreased by 6 percent for men. That's largely because many men work in manufacturing jobs, a sector that has seen its numbers dwindle. Women, meanwhile, began to work in greater numbers during the same time period, and made steady gains in education, which translated into increased earning power. What's more, the changing role of marriage may also play a part in women taking more control over the assets of the union. The average age of a bride in 1998 was 25, nearly five years older than in 1970. The theory: Living single longer has better prepared women for managing finances in a marriage.

Yet, marketers, particularly those in the financial services industry, have been slow to take advantage of this shift. Part of the reluctance: The belief that women only handle chump change, and that they are overly-cautious and unwilling to take risks with bigger-ticket items, Cohen says. Yet, 66 percent of female-headed households owned mutual funds in 1998, up from 45 percent in 1996, according to SRI's survey. In fact, women are more confident than ever about their financial prowess. In 1994, nearly 60 percent of women agreed with the statement, "I sometimes feel stupid when asking questions about financial matters." Today, that figure has fallen to 44 percent. "Over the last 15 years, marketing was directed specifically to the male," says Taylor. "Banks are subtly changing that today by putting couples, and more women, into their ads."

Some companies are doing even more, in an attempt to make systemic changes in the way they target couples. For example, American Express Financial Services has discovered that the best way to get a married couple's financial services business is to market to the woman. "It's the woman that gets the husband to sit down with the financial advisor," explains Jane Taffe, marketing director for the women's market at the Minneapolis, Minnesota-based company. "We try to get the couple by going through the woman."