Tag: episode-1217


October 16, 2015


Hello and welcome to this edition of WEALTHTRACK, I’m Consuelo Mack. Since we launched WEALTHTRACK in 2005 our mission has been to help our audience build financial security to last a lifetime. It’s a gender neutral goal. However our surveys show that the majority of our viewers are men, which is why we started our series WEALTHTRACK Women a few years ago, to specifically reach women and address their financial needs and priorities, which it turns out differ from men’s in some significant ways.

Number one, women live longer than men. The vast majority can expect to be solely responsible for their finances in their later years. The average women typically earns less than a man does over a lifetime. Yes there are some much publicized pay disparities but another major reason is that women work fewer years than men. Here’s where both priorities and necessity come into play. Women take more time off to raise a family or act as a caregiver for aging parents.

A recent Transamerica Center for Retirement Studies survey found that 28% of women work part-time compared to only 14% of men, translating to a lower wage base for them and a lesser likelihood of access to important employee benefits such as health care and retirement plans. Then there are the psychological challenges.

A Fidelity survey found while 92% of women want to learn more about financial planning, 80% confess they have refrained from discussing their finances with those they are close to saying it’s too personal, they don’t want to share the information, it’s too uncomfortable.
And only 47% say they would be confident discussing money and investing with a financial professional.

This week’s WEALTHTRACK guest is committed to overcoming that reluctance and empowering women to take charge of their financial lives. She is Jewelle Bickford, Partner and Wealth Advisor with Evercore Wealth Management where she focuses on family governance and private wealth education with a special emphasis on women through her Wise Women series. Prior to Evercore she was a senior strategist with Genspring Family Offices where she worked with high net worth families, again with a focus on women and wealth. And before that she was the only female Global Partner at the investment banking firm Rothschild Group where she was in charge of their Global Asset Securitization business.

In the decades I have known Bickford she has always devoted substantial professional and personal time to helping women succeed. I began the interview by asking her why it is so crucial for women to manage their financial lives.

JEWELLE BICKFORD: Well, because quite literally their life may depend on it. Life’s transitions or events don’t happen at a convenient time. I have lots of young friends who were out of a job after 2008, some of them for as long as 19 months. I have women who are taking care of aging parents or an aging spouse or God forbid that they are widowed. So the surveys show that women don’t deal with their finances until there’s a crisis, and at that time they are bereft. It is exactly the time not to want to be learning on the job, and if nine out of ten of us are going to be solely responsible for our wealth at some period in our lives, why don’t we start early?

CONSUELO MACK: And why don’t we start early? Why are women so reluctant to take charge of their finances?

JEWELLE BICKFORD: Well, I think there are a couple of reasons, and I think it’s best described by fear. The surveys again show that the 47 percent of all the women in the United States fear running out of money before they die, and of that 47 percent, almost a third of those women have good jobs and good salaries. So it’s fear. It’s the bag …

CONSUELO MACK: This is the bag lady syndrome. Right.

JEWELLE BICKFORD: The bag lady syndrome, and so it’s intimidating, and you don’t know where to begin, and where you hear the media screaming and the market’s gone down, you almost would rather not think about it.

CONSUELO MACK: One of the things that you told me before this interview was that another reason that women are reluctant or just don’t get involved is because we’re so busy living period, and that it seems so daunting and overwhelming, that we’re taking care of everything else in our lives instead of focusing on our finances which seems like a selfish thing to do. How do you overcome that?

JEWELLE BICKFORD: Well, I think we start in our office with self-awareness. It’s very important to understand the emotional ties you have with wealth. Kate Levinson wrote a wonderful book called Emotional Currency, and I recommend that to a lot of my female clients for the very reasons you say. They’re very busy and they’re happy to put it off, and they’re happy to delegate it to me, and that’s all right up to a certain point, but we have to understand what their goals are in the context of their wealth, and so I start with self- awareness.

CONSUELO MACK: And talk to me about this self-awareness, why that’s so important and maybe for women in particular that our early experience with money just kind of shades our entire view of money for the rest of our lives?

JEWELLE BICKFORD: Absolutely unless you have self-awareness about it. One of my really good friends who you may have interviewed on this program who’s a very, very successful woman on Wall Street told me that several years after she was earning a six-figure salary, she was walking through Saks Fifth Avenue and she saw fur coats on sale, and she said to herself, “You know, I can buy that fur coat.” Well, she had been able to buy that fur coat for 15 years, but her childhood when she was raised in very modest circumstances; her ties to wealth were from her memories that I can’t afford that fur coat. So I think first you have to understand that, and often it’s over spending. It’s not just not being able to spend.

CONSUELO MACK: And the flip side of that too is that if you come from very comfortable circumstances or a wealthy background, you can’t imagine being poor, and that’s unrealistic as well. Right?

JEWELLE BICKFORD: Yes, and many, many millennials who come from families of wealth have that problem, bringing their spending under control. So I start with self-awareness, and I start with the intimidation factor. I have many friends who say to me, I mean I would say at least one a week, “Jewelle, I’m not good at math. You’re good at math. My husband takes care of the money. I don’t really want to get into that.” We have to break it down for them to want to engage. You have to break it down into small bits, and your financial advisor has to be willing to work with you because women have very different ways of investing than men do.

CONSUELO MACK: Explain that to us, and I will also preface that with another one of the statistics that you shared with me and that we’ve used on WEALTHTRACK as well, is that in the first year of widowhood, for instance, is that 70 percent of women leave their husband’s financial advisor. So clearly there is something wrong in the traditional relationship with financial advisors.

JEWELLE BICKFORD: Well, I think the issue is that seven out of ten financial advisors are males, okay, and in addition to that the large banks and money management firms are really not used to having to take the time to deal with women’s emotions. I call it closing the gap between the emotional and financial aspects of a woman’s life because, as we said, you bring these childhood ties to how you spend money. You’re very, very busy. You don’t want to deal with it now given all the other things in your life. So to break that down it takes time, and we find in our office, and the studies bear this out, that women have a need for certainty, all right, and to have certainty you have to have a plan, and to have a plan you have to understand your goals in the context of your living situation, and that takes time.

CONSUELO MACK: So what are women’s financial priorities and how do they differ from men?

JEWELLE BICKFORD: Well I have this discussion with my husband and my male colleagues at Evercore all the time. I have never heard a woman on the golf course say, “I’ve got a hot stock,” or “Oh my god, my money manager shot the lights out because last year he returned X.” Women just don’t talk about money that way, especially in our generation. They were taught not to discuss money. So it’s really more in the context of what the money will do for you. Can I educate my children? Do I have enough money to give to charity? We at Evercore have seminars all over the United States in our various offices, and we answer three basic questions over and over again. Will I have enough money to last my lifetime? Do I have enough money so I can give to charity? What are the questions I need to ask to know I have the right financial advisor? All right? Those three questions in different ways we answer over and over again.

CONSUELO MACK: And do men not have those same questions? They’re not asking themselves, will I have enough money to last a lifetime? Will I have enough money to give to my favorite charity?


JEWELLE BICKFORD: I tend to get performance questions from the men over and over again. How does Evercore perform? How do you view the market? Give me market feedback. It’s not really in the context of their goals.

CONSUELO MACK: So let’s talk about especially the third part of that question which I’m intrigued by. What are the kinds of questions that one should ask a financial advisor if you’re a woman especially?

JEWELLE BICKFORD: Well, I start with your spending and how much you need to maintain your lifestyle. I mean what woman wants to have her lifestyle diminished? What human being really wants to have their lifestyle diminished? So you need to understand what you’re getting off your portfolio, and this is after taxes and after inflation so that you have enough left and that you have this over a long period of time. You really have to be very nimble, and this is something that you have to reassess especially after 2008 on an annual basis if not more often than that.

CONSUELO MACK: The traditional financial planning approach has been if you have a diversified portfolio you’ve got that pie chart, and you take a drawdown from that portfolio of X percent, three percent or whatever it is, every year. That’s the model, but you’re saying that diversification now among all financial asset classes, that’s no longer a valid model after the financial crisis. Why not?

JEWELLE BICKFORD: Well, why don’t we go back a step and talk about that in the context of how a woman builds financial security for a lifetime. I start with knowing how to spend money wisely. All right? There was an American Express study out there for all their female Platinum card members, and it asked the question and I received it and I remember it very well. It said, “What is living well with your wealth to you?” 85 percent of the respondents, all female, said being healthy. Another 83 percent of the respondents said having enough time to do the important things in life. 81 percent of the respondents answered two questions, 81 percent, knowing how to spend money wisely and having a good relationship with your spouse or your partner, and probably those two things go together in my experience. So knowing how to spend money wisely has lots of subtext to it. So understanding how much income you need to maintain your lifestyle is the most important of that subset. So I start with that. How much do you need? Then we have to understand your tolerance for risk. All right ..we find that at Evercore we have three buckets, all right? Capital preservation, balanced and capital appreciation.

CONSUELO MACK: So those are the three portfolio approaches, the three basic approaches.

JEWELLE BICKFORD: Since 2008 we have really concentrated on these three buckets, and within those three buckets we tell our clients and our prospects what are the drawdown possibilities. Even in capital preservation, you can lose 12 to 15 percent in a 2008 scenario.
It doesn’t mean it’s not going to come back, but when you see those dips. Why don’t we call it a dip for the purposes of the audience, all right, and in a balanced account which is 50 percent stocks and 50 percent bonds or bond-type instruments or stock-type instruments, you could lose as much as 20 to 25 percent and, of course, in capital appreciation which the majority of that bucket would be stocks, you would lose exactly what the average person did in 2008 which is 30 to 35 percent.


JEWELLE BICKFORD: Huge hit. So we tend to find when the women come into our office once we’ve looked at everything in the context of their spending and their needs after inflation and taxes, that they tend to be capital preservation and balanced, somewhere in there.

CONSUELO MACK: So they’re more conservative which is what typically women are considered to be more conservative investors.

JEWELLE BICKFORD: Yes, and within that context we advise all of our clients, male or female, that since 2008 they need a cash component to their portfolio. That would probably be equivalent of at least six months but preferably a year’s expenses.

CONSUELO MACK: And the reason for that is …

JEWELLE BICKFORD: Because you don’t want to have to sell in a 2008 scenario. Many, many, many of those companies came back. So if you have a good fundamental stock portfolio … and we’re not growth or value. We’re fundamental. We look at the company’s fundamentals, and many of those companies will come back. So the dips are not a time for you to panic, and when I said in the beginning that women need more certainty and a plan, this is part of our plan, to have cash so you don’t panic.

CONSUELO MACK: So when you’re looking at the distribution that you take from a portfolio every year, do you consider the cash portion to be separate from that larger number? So in fact …

JEWELLE BICKFORD: It’s part of the bond allocation, very short-term bonds or cash. It’s part of the fixed income allocation. I mean it could actually literally be cash depending on how the woman felt, or it could be very short-term instruments that can be liquidated very easily.

CONSUELO MACK: It’s interesting that investors overall have been very skittish about the stock market since the financial crisis even though we’ve had a phenomenal bull market. And In fact, if you look at money flows in mutual funds to ETFs, the vast majority have been going to fixed income. Number one, all investors are afraid of the stock market, and they have not believed this bull market, and number two is for women in particular they’re probably very frightened of the volatility that they’ve seen in the stock market. So how do you answer those fears?

JEWELLE BICKFORD: I answer those fears by telling them, number one, and this is a fact. It’s not even just the past and the future. It’s just a fact. With interest rates being so low on bonds and fixed income instruments, there is no way you can only have bonds in your portfolio if you want growth and if you want your portfolio to last over for your lifetime. You just have to understand that. It’s not possible, and I can show them charts, and I go very slowly. We have a famous chart in our office like this, and I’ve now put August and September on that chart so they’ll see that even though in 2008 the dips were huge, the high and the lows, here August and September’s barely perceptible on this chart because in the context of long term it’s nothing, okay? So that’s why I say women take more time. You can’t just tell them this. They have to experience this. So my clients now are experiencing that they’re not worrying, or I hope they’re not worrying because they don’t have to sell, and they have cash for their needs.

CONSUELO MACK: The other interesting thing that I know that you mentioned to me before is that there have been surveys of women executives and what they feel. So we’re talking about upper income women and what they feel that their priorities are and what they feel their financial responsibilities are. They’re taking on more financial responsibility than just their nuclear family.

JEWELLE BICKFORD: Well, that’s something near and dear to my heart because I think when you’ve been successful in your profession as you make money, more and more people look to you to do more and more things for charities. They expect you to make a larger donation. Your family looks to you for help if family members have not been as fortunate in their careers as we’ve been in ours. So again the surveys show that 65 percent of successful women are helping family with their needs, and a large proportion of those women are doing more than just helping. They’re maintaining the lifestyles of these other family members, especially if they’re elderly parents. Or we find often in our office children with special needs. We’re having to set up trusts or things for children that have had particular problems. So the demands on women in general are immense, but the demands on women who are successful in business or in careers, the studies show are even more than normal.

CONSUELO MACK: So this is telling me, Jewelle … and is this the correct inference … that actually women probably need more. They need more money than their male equivalents because they’re taking on all of these responsibilities, and they live longer. I mean is that the case? So if a man comes into the office and a woman comes into the office, same age, same budget, you’re going to say, “I’m sorry Ms. you’re going to need actually more money. You need to save more, invest more than your male equivalent.”

JEWELLE BICKFORD: Well, let’s break down that question. I mean when men and women come into our office, we ask them the same kind of questions. We don’t differentiate, but what I’m trying to explain is we get different answers from women than we get from men. That’s a very important distinction.

CONSUELO MACK: Very important distinction.

JEWELLE BICKFORD: And we go through the same thing with men, but they’re more about performance and women are more about using their money in the context. Now women do live on average five to seven years longer than men. So definitely they are going to need more money, and hopefully we’re positioning those portfolios with some stocks in them for growth no matter how conservative they are so that that will happen over a period of their lifetime.

CONSUELO MACK: Why are you so passionate about educating women and empowering women financially? Because I know this has been a lifelong crusade of yours.

JEWELLE BICKFORD: Well, I wasn’t really aware of it being a lifelong passion, and you just sort of default to these things. Until I was in my job before Evercore, I worked at a very, very large multi-family office, and I put together the Women and Wealth strategy for all the women there, and that’s when I realized that you had to start with self-awareness, and my own self-awareness was that my father was a very successful entrepreneur in the late 40s. He was president and owner of Alaskan Airlines, partial owner, and it was a cargo airline then. So they leased the planes in the brutal Alaskan winters to first the Berlin airlift in 1949, and then they won a contract to fly all the Jewish people from Asia and Aden in what was then the new State of Israel, and these were very dangerous flights going over Arab lands. So they had to insure all the cargo who were these mainly Yemenite Jews, and there were no accidents. So my father’s share of the insurance proceeds what was in today’s dollars would be many, many hundreds of millions of dollars.

CONSUELO MACK: So there’s a childhood of wealth. JEWELLE BICKFORD: A childhood of great wealth. CONSUELO MACK: So he lost his fortune.

JEWELLE BICKFORD: He lost his fortune. He made it back again once, but by the time he died in 1984, I paid for all of his funeral expenses, and having lived this up and down with basically what was a gambler … I mean he was a promoter and investment banker, but he was really in my view a gambler … I decided that would never happen to me, and I’ve always as a result of that, having had so many ups and downs in my childhood, have been very compassionate to women in the developing world who have had these terrible situations imposed upon them where they had no ability to make a living which is why, as you know, I’ve been so involved in Women for Women International.

CONSUELO MACK: Last question. The One Investment for a long-term diversified portfolio. What would you have all of us own some of?

JEWELLE BICKFORD: Again I would go back to having a cash component always in your long-term portfolio. Other than that, diversification is made up of many, many instruments and, depending upon your tolerance for risk, you can be in ones that are less liquid or more liquid, but my only piece of advice would be that cash component.

CONSUELO MACK: And the cash component, enough to cover six to twelve months of living expenses.


CONSUELO MACK: So in a market downturn like we had in 2008, we don’t have to sell from the portfolio we’re going to need to support ourselves for a lifetime.

JEWELLE BICKFORD: Yes. Even if you are in a capital preservation portfolio which has a small component of stocks. You have to have stocks in your portfolio for growth even if they’re a small amount, and it’s mostly fixed income, say 70/30, 80/20. I would have of that fixed income a portion of cash so that you are safe and not scared.

CONSUELO MACK: Which is so important for women as we have just discussed. So Jewelle Bickford, thank you so much for joining us.

JEWELLE BICKFORD: Thank you for having me.

CONSUELO MACK: At the close of every WEALTHTRACK we try to give you one suggestion to help you build and protect your wealth over the long term.
This week’s action point concurs with Jewelle Bickford’s one investment recommendation which is to: Build up a cash reserve. Cash has been denigrated in recent years because of its inability to generate returns in a low interest rate environment. That is true, but that is not cash’s primary purpose. Cash gives you choices, flexiblity, security and opportunity.

Cash truly is king to meet life’s needs and vicissitudes. Everyone needs a stash of cash.

Next week we have a rare treat for you, an exclusive interview with Financial Thought Leader Michael Hartnett the Chief Investment Officer of Bank America Merrill Lynch who oversees the firm’s global research. He will identify the best investment opportunities and the worst risks in the world today.

To see this week’s program again and hear more of our EXTRA interview with Jewelle Bickford, go to our website wealthtrack.com. Also thank you for continuing to reach out to us on Facebook and Twitter. Thank you so much for watching. Have a great weekend and make the week ahead a profitable and a productive one.

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