A Woman with Purpose: Paula Polito

A Woman with Purpose: Paula Polito

Women are more educated, more successful and more outspoken than ever. Yet many, in fact forty-eight percent, are still leaving major decisions about money to their husbands or partners. Paula Polito, Vice Chairwoman, Global Wealth Management at UBS, and one of the most powerful women in finance, believes more women need to take control of their financial futures.

Through UBS’ “Own Your Worth” research program, Polito investigates why nearly half of the women surveyed still abdicate long term financial decisions to their partners. By studying the rationale, she aims to change the trend for current and future generations and get women to take an active role in their financial lives and become more financially smart.

We talked with Paula Polito, our Akris Woman with Purpose, on what it takes to change that pattern.

Why are women still hesitant to invest?

There have been a lot of theories about this, but for the past 5 years we have conducted research and analysis with thousands of women to understand why women engage or do not engage with their finances. It’s hard to believe that in 2022 fifty percent of women still leave important decisions to their partners, particularly when it comes to investing and financial planning. This financial “abdication” has and will continue to have a significant impact on women and families. For example, long term trends show that 8 in 10 women in the US will end up solely responsible for managing their financial well-being at some point in their lives. This is due to longer life expectancies, rising rates of divorce and decreasing rates of marriage.

The reasons why women are persistently reluctant to participate in long-term investing decisions are fascinating and often have to do with traditional gender roles. Stereotypes continue to prevail. Women feel they are too busy with their own careers or taking care of the house and kids. In many cases, they don’t feel as well-versed on the subject as their spouse. Or they want to be taken care of. In same-sex couples too, we see one spouse abdicate to the other forty percent of the time.

The second issue lies within the wealth management industry. There continues to be unconscious bias and many women do not have a seat at the table with the family’s advisor. The assumption is the spouse is in charge. Additionally, true financial advice transcends the markets and portfolio management; it’s also about setting and attaining life’s broader goals such as philanthropic endeavors, providing for future generations, sustainability, etc. Finally, alienating industry jargon disengages some women. To meet the moment, financial advisors have an opportunity to bridge the gap between couples.

Most importantly, there is a difference between delegation and abdication. In fact, women who partner with their spouses on long-term decisions, or at the very least are involved in their finances, report soaring levels of satisfaction. Nearly all have higher confidence in their future, feel less anxious about money and make fewer financial mistakes.

What can be done to get more women to take control of their financial future?

Women need to recognize that there is a price for their indifference. Many women remain indifferent towards money matters because they think it frees them to focus on other things like family, work, charitable or social activities, etc. In reality, it often traps them. Every woman should be asking themselves whether they actually want their rightful seat at the table. I believe the answer should be an emphatic, “yes.”

In our research, women told us they faced financial surprises -- decisions their spouse made without their knowledge. No wonder so many women have regrets. Ninety-eight percent of divorcees and widows say if they could do it over, they would have been more involved with their money.

We have to reframe the dialogue. The best kind of financial advice goes beyond investments. It connects to the facts of life: What keeps you up at night, taking care of your children, not outliving your money, making the world a better place. What woman wouldn’t want a say in these things?

More women will come to the table when we start calling financial planning what it actually is — having a practical dialogue about architecting a life of value and a path to get there. Focus on things like spending, debt, retirement, family values, philanthropic giving, etc. As women’s economic power rises, this shift is imperative.

We all share the responsibility for change. For men, taking concrete steps to encourage more women to play an active role in long-term planning is a first step. Include women in conversations with advisors, participate in the planning process together, make sure your partner understands your joint portfolio, and don’t ask her to “just sign” the financial documents. When couples collaborate, both partners report less stress, more confidence about the future and greater financial security.

For women, holding ourselves accountable is crucial. Covid-19 has certainly caused outsized setbacks for women, but it has also been a catalyst for change. Our research shows that most married women began talking about money with their spouse more during the pandemic.

Women need to be sure to help other women. This is a topic that should be discussed more with friends and family. Women who have a seat at the table need to be sure to bring other women along the journey. And the men in their lives should take responsibility for being inclusive.

As they say, it takes a village and this a movement we are embarking on. We must start now.

What energizes you the most at work?

It has to be facing challenges and finding ways to move the needle. I have always believed that one can constantly improve. That good is never good enough. The world and businesses are in a constant state of change and flux. So to me success has always been tied to staying relevant and raising the bar. Whether that is helping create more value for companies, giving clients a better experience, creating a more inclusive environment for employees or communicating a vision that is clear, concise and achievable. Continuous improvement is a lifelong journey.

What action or decision in your career are you most proud of?

Taking the right risks. If I didn’t take those risks, I would never have had the opportunities that presented themselves in my journey.

Is there a quote or life motto you try to live by?

True success only comes when you are helping others be successful.

Why do you believe in the power of purpose?

As Mark Twain said, the two most important days in your life are the day you were born and the day you find out why. That’s when you truly understand what purpose means on a personal level. Without that there is no true destiny or measuring your life’s accomplishments.

There is certainly a greater focus on purpose than before. One of the interesting findings in our data among women was that more women said they were more purposeful post the pandemic. For example, whether it was being more charitable, spending more quality time with their families, using their purchasing power more effectively, investing in sustainability……almost eighty percent of women said they had a greater focus on defining and executing on their purpose.

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