From the October 2006 issue of Boomer Market Advisor • Subscribe!

October 1, 2006

Meet the needs of female boomer business owners

With almost 50 percent of all private U.S. firms at least half-owned by women, female entrepreneurs represent an increasingly compelling opportunity for financial advisors. The results of an Oppenheimer survey of members of the Women Presidents' Organization, a group of successful female business owners, help determine how to best identify key opportunities in this segment, find suitable prospects and meet female business owner needs.

The first step in serving the financial needs of women business owners is to understand their perspectives on both business and household investing. The survey findings translated into six key opportunities. It found top women business owners:

1. Need and want advice: Successful female entrepreneurs are too busy running their businesses to devote enough time and effort to investing.
2. Are decision-makers: These women are more likely than others to be the primary investment decision makers for their businesses and their households.
3. Like consistency: The majority use advisors for both business and household planning needs, and 86 percent use the same products and services in both areas, says the Center for Women's Business Research.
4. Have a higher risk tolerance: These women are willing to accept more risk for potentially higher returns, in both their business and household investments. They're open to more sophisticated strategies.
5. Rely on the advice of others: To find their current financial advisors, respondents overwhelmingly relied on referrals from personal and business contacts, especially their accountants.
6. Reward loyalty: Successful female entrepreneurs consider a vendor's support of women's entrepreneurship a factor in their buying decisions.

Finding prospects among affluent women business owners isn't difficult if you know where to look. Ask current clients for referrals. Your clients are your strongest advocates, and they're in the perfect position to recommend you to the right people. Also, network with professionals in your area. Accountants, attorneys, insurance agents and others with whom you have a good relationship can be great sources of referrals. Lastly, contact local women's organizations. Working with local chapters of national organizations for women business owners is another way to get your face and name in front of prospects and referral sources.

But developing a clientele of successful women business owners takes more than good prospecting skills. You need to show prospects and clients that you understand their unique needs and have the expertise to service them effectively. Our research found that the following areas are most critical for women business owners.

Business retirement plans - More than 80 percent of the women surveyed offer a retirement plan to their employees and, for more than one-half of respondents, that plan is a 401(k). Ask prospects whether they're satisfied with their current plans.

Personal retirement issues - You may discover that these women's efforts and assets have been so tied to their company's growth that they have spent far too little time considering finances after they leave their business.

Wealth management - While retirement is always important, asset accumulation, wealth preservation and savvy tax planning are just as critical to the financial well being of these clients.

Estate planning - It's never too early to start planning clients' estates. This is particularly true of high-net-worth clients.

Philanthropic interests - Don't forget that women regularly express the need to give back. Women business owners can meet their philanthropic objectives while reducing taxes with products such as trusts or donor advised funds.

Winning over affluent women business owners is worth your time and effort, so take the following action:

  • Ask current clients for referrals.
  • Familiarize yourself with prospects in your local area.
  • Become an active member of your community.
  • Build your relationships with CPAs and attorneys.
  • Sell the benefits of comprehensive advice from a single advisor.
  • Communicate with prospects and clients on a regular basis.
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