May 10 2022
Three tips to serving the financial needs of single mothers
By Ariana Ubina
“I know a lot of single mothers who feel they are viewed as a failure by other people, having their careers and goals set aside to take care of their children,” Luviminda Sacro, a two-year MDRT member from the Philippines, said. “Also, incomes for single-parent families have been reduced to half of what they usually are. COVID-19 has sharply affected women’s employment, especially single mothers.”
Three years into the pandemic, the Philippines has about 15 million single-parent families, 95% headed by women. Yet, Filipino women are still perceived primarily as homemakers and not breadwinners. Women’s labor rate participation in January 2022 plummeted to 48.1%, a stark contrast to that of men at 72.9%. According to the University of the Philippines Center for Women’s and Gender Studies, an employer’s instinct is to let go of the female staff first because they assume there’s another breadwinner in the family.
A financial advisor with a heart for servicing single mothers, Sacro shares how financial advisors can better guide single mother clients financially.
1. Hear their stories out.
“Single mothers have various pasts that resulted in their current life situations. Some may have accidentally bore a child out of wedlock and were left alone by their partners to take care of the kid solely. Other moms may have separated from their spouses for unfortunate reasons and kept custody of the child. Also, women are generally blamed for the ending of marriages or relationships. These are just some accounts, but commonly, it’s a painful story that drains these women’s energy, confidence, and self-respect. From my experience, these are attributes that single mothers need help with before being empowered by financial literacy and education. That’s why advisors must understand the backdrop they are up against when talking to single mothers to serve them best,” she explained.
The Central Bank of the Philippines has emphasized the need to improve Filipinos’ financial literacy over the years. A 2015 World Bank survey suggests that Filipino women are more financially literate than men in understanding the purpose of insurance and owning a formal bank account. However, negative gender biases such as women registering higher unemployment rates debilitate their financial capabilities.
Despite the difficult circumstances, Sacro is firm that financial advisors should still consider prospecting them despite the harsh economic times. “They need all the support they can get. As advisors, we can help them improve their financial situation by starting their savings and building their wealth to future-proof them from any crisis. For example, a single mother client of mine of about 10 years now was able to build a passive income through her insurance policy which she used to provide for the needs of her family without sacrificing their lifestyle. When they experience firsthand the value of savings and financial products, they become an advocate and inspire other single mothers to do the same.”
2. Plan their financial security.
“After a financial advisor earns a single mother’s trust, that’s the time to create a policy that would be the most beneficial to the client based on their needs and budget. In my experience, the biggest concerns for single mothers are:
- If I get sick, whose income can my family depend on?
- When I get old, who will look after my future self?
- Who will provide for my children if I die before they’re of working age?
“As they are the sole pillars of their homes, it is crucial for them to have a contingency plan addressing these concerns. The most important goals include income replacement, financial aid for critical illness, educational plans for the children, and retirement.
“On top of these needs, I believe financial advisors can help address the dark reality of single mothers who often flee from their partners to protect themselves and their children through financial education. Teaching them how to allocate their finances for savings effectively gives them a fighting chance to live independently.“
3. Keep in touch.
“I was able to help one of my single mother clients to sustain their needs amid the pandemic because of the constant communication I keep with them. At first, she had difficulty sourcing the funds to survive the lockdowns. It helped that I checked on her to see how she was doing, especially at the height of the pandemic, which helped pave the way for her financial recovery. As policies aren’t always at the top of the mind of clients, advisors give added value when they consistently keep in touch with clients to offer them products and solutions, which may turn out to be timely and needed,” Sacro said.