Rethinking your wealth for more security and peace of mind

We often look at performance as a race, whether we’re thinking about our career, family or finances. Things move fast – sometimes too fast. But Stéphanie Baldinucci, Luxembourg Market Private Banking Coordinator, who provides wealth management support and advice to women (and men) widens the lens. During the inaugural ELLE Summit, organised here at Banque de Luxembourg, she focused on performance as encompassing financial peace of mind, forward planning and investment, while aligning values and goals. Interview with Stéphanie.

Why did you want to be part of this event dedicated to performance in the feminine?

This event committed to inspiring and redefining performance for women struck a chord with me, so teaming up with ELLE Luxembourg was an obvious and natural choice.

Like many women, I too strive to balance work and family life, which feeds into my ideas on wealth management. Instead of a source of even more pressure, I see wealth management as providing direction and creating breathing space. For me as a woman, this summit offers something rare – the opportunity to talk freely about ourselves, our wealth, career and family in a friendly and supportive setting, leaving taboos at the door.

By opening the bank’s doors to the ELLE Summit, we wanted to demystify seemingly complex concepts and cut through the noise. With the right support, good management and advance planning, we can help women to navigate day-to-day choices and achieve their goals with confidence and ease.

How would you define wealth management for women, and how does it go beyond the strictly financial?

Wealth management for women is not just about metrics and returns. I see it more as an intimate conversation about life, values, changes and life events, such as the arrival of a child, a separation, a career change, a decision to relocate abroad, or passing on family wealth. Wealth management is a powerful tool to empower women and help them reach their full potential. Beyond accumulating wealth, it is also about giving meaning to what we build. Because, behind an investment portfolio or real estate asset is a life story, a legacy, real-life plans, and the mark we ourselves want to leave behind.

We opened the “Your wealth deserves more” workshop, organised as part of the ELLE Summit, by looking at some of the realities specific to women:

• More women work part-time.
• They earn less over time due to the gender pay gap.
• Women have a longer life expectancy.
• They are often more risk-averse.

All these points have a direct impact on their capacity to invest, the need for an additional savings nest egg and for retirement planning.

Wealth management is not just another arduous task. Rather we should see it as liberating, an opportunity to think and reflect, and a way of aligning financial planning with our values.

How can wealth planning give women more peace of mind?

I firmly believe that peace of mind and the freedom it provides are the true measures of performance – not a person’s bank balance. If you are unclear about your finances – “I don't really know how much I have or what I can afford” – then money generates stress and a feeling of not being in control.

This is where wealth planning comes in to bring clarity instead of uncertainty. Practically speaking, planning starts with a very simple exercise: we conduct a review of your wealth and structure your assets by time horizon. What do you need to have on hand for the unexpected? How much can you invest in the medium term? How much can you invest over 10, 15 or 20 years?

The workshop took the fictitious case study of Louise, 45, recently divorced, with two children. She has significant cash reserves in her bank accounts, a property, and some investments, which she made somewhat “at random” on an online platform. By simply clarifying her objectives (finding a new home, securing her financial position, and preparing for her children's future) and classifying her assets from most to least liquid, she took back control of her wealth.

Then there’s the question of time. The earlier you start investing, even with modest amounts, the more time works in your favour. Compound interest – earning interest on interest – puts your money to work for you, not the other way around. Inflation on the other hand quietly eats away at the purchasing power of money that is left sitting in an account.

By setting up long-term savings and matching risk levels to her profile, a woman can gradually step away from the race mentality and guilt (“I should take care of it, but I don't have the time.”). Instead, she is putting together a safety net and creating some leeway for herself. But most of all, planning and structuring her finances means she has more choices – a new training course, a sabbatical, a business project, or part-time work by choice rather than necessity.

What first reflexes or “small steps” did you share during the workshop?

I hope I helped participants realise that, as women, we mustn’t simply “delegate” responsibility for future-proofing our finances. Statistics on part-time work, the pay gap, longevity and lower risk appetite all point to the fact that if we don't take ownership of these issues, no one else will do it for us.

You don't need to be an expert to act.

What’s important is to find a partner you trust, to ask questions and to not be afraid to say “I don't understand. Can you explain it to me?”

Three smart habits to cultivate

1. Talk about your financial situation. A grasp of your wealth and its composition is one step towards taking back control.
2. Get support for the important decisions that can have serious consequences: taking out a mortgage, inheritance, investments and a career changes.
3. Be proactive and don’t let your capital sit idly. Even if you’re naturally risk-averse, it’s important to put together a financial buffer and then start investing small amounts regularly, in line with your goals and investment time horizon.

In essence, the principle of taking small steps can be very effective. These might include making an appointment for a financial review, setting up a child’s first savings plan, moving some cash into an interest-bearing account, or starting a conversation as a couple or a family.

You don’t need a large sum of money to start investing. Regularity and alignment with your life goals matter more than the initial amount.

What advice would you give women who don’t pay enough attention to managing their wealth?

I’d advise them that putting their finances on the back burner is not a good strategy. Every year that passes without a decision reduces their room for manoeuvre. Then, I’d suggest they look at their wealth differently, as a resource, as energy they can harness to achieve their goals.

My role is to encourage our clients into this way of thinking as early as possible. Our philosophy is to provide personalised support to put the foundations in place and structure a long-term wealth management strategy. And our multidisciplinary experts are there when clients need additional specific support from tax experts, lawyers, credit analysts, estate planners or cross-border specialists.

One final piece of advice?

My advice to anyone who still says “I’ll do it later” is to set aside one hour to talk about it and review your finances. This one simple step could transform a stressful subject and set you on the path to financial freedom.