Why Financial Planning is Important for Women Entrepreneurs

In my profession as a financial planner, I consider myself to be a problem solver, which is one of my greatest strengths. I am adept at surveying a situation and quickly identifying ways in which it could be improved. My clients take comfort in knowing they have someone in their corner listening, understanding, and offering solutions. They value the ability to share the things that are going well in their lives with someone who views them through a lens intended to manage risks and protect what they have accomplished. They also value the opportunity to be excited about their dreams and vision for their future with a professional skilled at charting a way forward, anticipating and accounting for potential obstacles and roadblocks.

This is especially important for clients to seek a trusted advisor and someone who looks like me. As an African American financial planner, the statistic shows that we only represent 3.5% of all financial planners. The Certified Financial Planner Board in a 2018 survey reported that only 23% of certified financial planners (CFPs) are women and just 3.5% are African American and Latino combined–that’s not a typo–despite their composing 30% of the American population. 

I am on a personal mission to encourage women, especially women of color to plan their financial future. The list of financial concerns (and opportunities) women need help facing is extensive; yet women are less likely to seek professional help. By not seeking financial advice, women risk falling behind male counterparts early on. They also expose themselves and their businesses to risks that can derail their success. Whether she is married, single or somewhere in-between, most women benefit tremendously from working with a trusted advisor, or team of advisors, to create a comprehensive plan that gives her a clear path toward her goals and manages life’s inevitable “what ifs”. Every woman leading herself, a family, a business, a career (or all of the aforementioned), through the maze of life, needs an objective problem solver in her corner championing the opportunities ahead and mitigating her risks. While we are all busy doing what strong, ambitious, determined women do: making big things happen and taking care of others; we must never, EVER forget to also take care of ourselves and the women we are becoming.

Which breaks my heart when I have associates and friends that could avoid inevitable financial situations. Take, for example, a friend I decided to follow up with regarding an accounting resource I’d referred her to. Her business is going extremely well, and she’d recently mentioned a need for support. “Hey, what’s going on?” I asked. “Remember me saying I’m ready to get serious about focusing on my health and finances at dinner last month?” she replied. “Of course, I do,” I said, assuming her next question would be a request to schedule time for us to begin putting a comprehensive financial plan in place for her family and business. I was not prepared for what came next: “Well, I started with some basic exams, and it turns out that I have Triple Negative Breast Cancer…” Her words becoming sobs.

I was both frustrated and angry because, on far too many occasions, I’d sent the “problem solver” to time out when spending time with her. An incredible woman, running a kick-ass company, in a male-dominated space, is now entering a fight to keep both her life and her business intact. I do not doubt, for a single second, that she will win. Knowing her strength, resiliency, and the love that surrounds her, she will get through this. My frustration and anger are rooted in knowing the difference the problem-solving financial advisor could have made in her ability to weather the storm. These are the facts:

• 62% of female entrepreneurs report their business as their primary source of income.
• More than one in four of today’s 20-year-olds can expect to be out of work for at least a year because of a disabling condition before they reach the normal retirement age.
• 54% of women are concerned that they will not have enough to live comfortably in retirement.
• 59% of young women worry about their finances at least once a week.
• 64% of women reported stress when thinking about investing.

There is much literature that surrounds the reason why women of color are not seeking financial advice from professional advisors. There are also a number of barriers that include the feeling of not having enough wealth to even have a conversation. I say to those women, think about your finances as a look into your future. Your current situation does not dictate your future situation; therefore, planning is critical to help take you to the next level. I cannot emphasize how critical it is to get the right financial advice to plan for the critical moments in your life when you have to deal with an illness, divorce, retirement, death, or any other situation, just be prepared.