Three top women execs and the challenges they face in their financial lives

Higher life expectancy, inadequate retirement planning and insurance, and risk aversion are some of the key issues they feel Indian women need to address

If you were a woman born in India in the early 19th century, you would probably have never even held a pen, let alone stepped into school. Today, 200 years after, women have marched much ahead, with educational qualifications and job profiles at par with men.

But while they are quite independent in their outlook, they still face unique challenges in their financial lives today. Business Standard discusses these issues with three of the country's women financial leaders. Here is what they had to say: 

Lakshmi Iyer, CIO, Debt & Head-Products, Kotak Mahindra Asset Management Co

Past ignored, future wise: Women in India have a higher life expectancy than men, making it imperative to have a comprehensive retirement plan.

Question: Longer lifespan, career breaks (due to pregnancy, childcare, looking after elderly) can lead to shortfall in retirement savings. Could you offer some advice on how to overcome this challenge?

Retirement planning, to my mind, is non-negotiable and applicable to both men and women. I have interacted with many women who assume that someone in the family is doing it, obviating the need to plan on their own. In fact, women in India have a higher life expectancy than men, making it imperative for them to have a comprehensive retirement plan. Additionally, some events, like pregnancy and extended maternity leave post-pregnancy, are very unique to women–which could also mean a potential shortfall in retirement savings. The key to overcome this challenge is to start early–often a cliché but worth emphasising nevertheless.

Also, at this juncture, it will be very useful to take stock of one’s monthly expense and make adjustments where deemed fit. This is another area where there is a fair bit of complacency. But if managed well, it could help save some bucks. One could also try to cut fringe expenditure–luxuries that get tagged as essentials, like pursuing a lavish hobby, reducing the number of holidays taken, etc.

Women are known to be enterprising, so it would also be good to evaluate monetising a hobby as deemed appropriate. Small things do matter, - such as settling credit card bills within the time period to avoid penal interest, which could burgeon if they remain unpaid for longer period of times. While these are great Kill bill solutions to try and overcome retirement shortfall challenge, the key is in trying to max out contributions as and when able. As it is said - Boond boond se sagar banta hai..(Small drops make the ocean) try to identify some of these areas and thus morph an adversity into an opportunity.

Vishakha R M, MD & CEO, IndiaFirst Life Insurance Co Ltd

Not My Own Policy: Women are under insured, data shows there are approximately 27 per cent female policy holders vis-à-vis 73 per cent  male policy holders.

Question: Do women buy adequate insurance for themselves? Or is it the men who buy life insurance cover and women don’t (especially those who don’t work)? Other issues you may have seen around women vis-à-vis life insurance.

Insurance is bought either because people understand that it is all about protecting future earning capacity or (simply) because it has been sold. In either scenario, the decision-makers are usually the ones with steady incomes or with a strong financial standing to insure their own monetary value for their loved ones.

In India, a woman’s contribution as a homemaker is invisible (and comes) without any attached monetary value, while a man’s (cash) contribution is visible. The concept of insuring something that is not monetised is not as prevalent. Here, the decision of buying an insurance policy is from the perspective of monetary value, so women don’t usually end up purchasing insurance for themselves. Data proves that there are approximately 27 per cent female policy holders vis-à-vis 73 per cent  male policy holders. In almost 97 per cent of the cases, life assured, and proposer are the same and only 3 per cent of the cases the proposer is a female.

We are all aware of the gender inequality in India’s labour force. There are fewer women in the workforce generally, and those who are are less likely to be in full-time jobs. However, increasingly, more women are contributing more to economic growth and society every year. From having the power to handle the workforce to being the main breadwinners to playing the central role of being a mother, sister, wife, daughter, and homemaker, they are handling it all with poise and panache.

Both men and women need to value a woman’s contribution in the overall scheme of things. Thus, we need to look at the purchase of insurance from the perspective of value that is being insured.

Mrin Agarwal, financial educator & founder, Finsafe India, co Founder, Womantra

Less risk, less stress: Women leave financial planning to men. So, tend to be more risk averse while investing

Question: Is women's risk appetite similar to men? And, do women really manage money?

For time immemorial, women have been led to believe that managing finances is to be done by men. While many gender roles have changed over the years, the same is not true where money management is concerned. This is because women have not seen other women or their mothers managing money and financial literacy is hardly imparted at home, school, college or workplace. With all the responsibilities of balancing home and profession, it becomes easier for women to give away this task to men.

Women are also scared of making losses and are often berated or made fun of for doing so. This makes them risk averse while investing. The overdose of information on financial markets also makes it confusing for women to choose products and hence they stick with tried and tested traditional even though they know that they may give lesser returns.

Women have achieved the impossible in other fields and can do so in managing their money. To start with, they need to believe in their abilities and need to take out time for this activity, more so because it is needed to lead a better life. The next step would be to spend time learning some basics for which there are courses and videos available. The learning is going to be a continuous process.

Instead of waiting for the perfect time, women need to dare to take the plunge. Losing money is an integral part of the financial journey and women should be prepared for it. Some key things to keep in mind would be:

• Stick with low-cost, simple products like Public Provident Fund (PPF), National Pension System (NPS) and Mutual Funds
• Do not jump in and out of products too often
• Try to work with a fee only financial planner for a detailed financial plan
• Be prepared for contingencies by buying life & health insurance

Nobody cares about your money more than you, Start managing your money now! Sometime later (invariably) becomes never.