Source: Stacey Francis
Stacey Francis never planned to become a financial advisor, especially for women going through a divorce. But a frank conversation with her grandmother changed the trajectory of her career.
Her grandmother Myra was a victim of spousal abuse and confessed before her death that she stayed in the marriage because she felt “financially trapped.”
“That’s what motivated me to go into this field,” said Francis, who founded Smart ladiesnon-profit organization providing free financial advice and education to women, along with its consulting firm Francis Finance in New York.
“This is really my love letter to my grandmother,” she said.
Francis, a certified financial planner and member of the CNBC Board of Advisors, founded Savvy Ladies in 2003, teaching workshops from her New York City apartment.
Today, the non-profit organization offers free virtual consultations nationwide, regardless of income, through financial hotline which connects women with a pro bono consultant.
While there are organizations dedicated to women living in poverty, Francis sees limited opportunities for those with an average income or wealth, such as women starting their first job, getting a divorce, or seeking advice as a single mother.
“There are just a huge number of women who are in desperate need of this financial advice,” she said.
Judy Herbst, the organization’s chief executive, said Savvy Ladies connected more than 600 women with consultants in 2022, with 174 calls in April alone.
Nearly half report incomes of less than $74,000 a year, Herbst said, with 60% saying they are the only member of their family.
There is a core group of callers in their 40s and older who understand the importance of accumulating wealth, Herbst said. “They are moving from debt management and divorce to finally asking, ‘How do I invest?’,” she said.
Savvy Ladies is also partnering with other nonprofits to co-host events such as financial education workshops, she said.
While the Savvy Ladies hotline answers a number of questions about money, questions about investing are common, especially among women in their 40s and older, Herbst said.
“Our portfolios need to work harder,” Frances said, explaining why women live longer and spend more on medical expenses but typically retire with less savings.
Indeed, the median income for women aged 65 and over in 2016 was $47,244, including earnings, retirement income, social security, and property. report for 2020 from the National Pension Institute. However, that figure for men aged 65 and over was $57,144.
Women’s assets must be held until age 95, she said, which could require higher returns if they start small. But volatility is often more of a concern for women with less experience.
Francis encourages women to “invest” to gain confidence, whether it’s working with a consultant or organizations like Savvy Ladies, taking courses or reading books.
“Investing for women is not pleasant, it is necessary,” she said. “The stakes are higher for women.”
Savvy Ladies has also helped aspiring female entrepreneurs who left corporate America to start businesses and current owners who have struggled to make ends meet, said Francis, who knows the challenges of building a company from scratch.
Aspiring entrepreneurs need to prepare financially, she says, starting with two separate emergency funds — personal savings and a commonly overlooked business reserve.
Women leaving a steady paycheck need a way to replace their earnings, she said, such as saving six to 12 months on living expenses, creating an investment income stream, withdrawing funds from a portfolio, or getting Social Security payments earlier.
“The most important thing is to make sure that what you are doing is sustainable,” Francis said. “And that you’re not lagging behind financially.”
Frances suggests setting up a schedule to generate a certain income that has worked for her business. For example, you can allow withdrawals from a portfolio for “x” years before replenishing those funds, she said.
Other women may start a business in parallel with a corporate job. “They will build this business,” she said, explaining how it can close the income gap between worker and owner.