From the October 2013 issue of Investment Advisor • Subscribe!

Room to Grow: How Advisors’ Approach to Women Might Hurt Their Business

Advisors need to reach out to women to grow their practices, but their methods leave something to be desired

Since word got out on the street that women are the demographic du jour, financial advisory firms, large and small, have been making a dedicated and concerted—aggressive, even—effort to cultivate a female clientele.

This is great news, according to experts like Kathleen Kingsbury, founder of coaching firm KBK Wealth Connection and the author of books like “How to Give Financial Advice to Women: Attracting and Retaining High-Net-Worth Female Clients” and the just-published “How to Give Financial Advice to Couples: Essential Skills for Balancing High-Net-Worth Clients’ Needs.”

Women were more or less overlooked for decades by a largely male-dominated industry. Now the dynamics have changed and women are not only achieving professional success and increased independent economic power, but are also increasingly becoming the primary breadwinners for their families. It is clear that financial planners have no choice but to reach out to women if they want to expand their practices.

However, that outreach, in Kingsbury’s view, leaves much to be desired. Not only is it too overarching and one-dimensional, viewing women as, well, just women, it doesn’t really help those firms that want to have deep, long-lasting relationships with a female client base.

“Women control the majority of wealth today so many firms are reaching out and developing content specifically for women and training their sales force on how to do business with women. Though the approach is well-intended, it feels as though financial planning firms are simply hunting women like they are deer,” she said. “The industry doesn’t really get what that feels like for women and that it needs to change.”

Rather than viewing women as one homogenous group and tracking them down simply because they’re the flavor of the day, Kingsbury believes financial planners need to come up with a more nuanced approach to attract women, one that seeks to understand the many differences among them and approach them as individuals as opposed to a mere demographic group.

“Financial planning firms must now have a different relationship with women,” she said. “They must be able to market to them differently by thinking of them in many different ways and in different dimensions.”

A stay-at-home woman, for instance, who supported her wealth-creating husband during his career and now wants financial planning advice in order to help her grandchildren, will require a different service from a young executive who wants to start a business, just as a widow will be very different from a single mom in her 30s. Firms that want to succeed with women really need to think about them as individuals with different situations in life and different character and personality traits.

Male Models

One could argue that just as the women’s market needs segmentation, so too does the male market. To a certain degree, “we should also be understanding men in the same, multi-dimensional way,” said Eleanor Blayney, a financial planner and consumer advocate for the CFP Board.

However, “I would argue that if we look at the changes that have taken place in women’s lives over the past 50 years, and given that today, we are still facing the legacy of those changes, the approach to women needs to be particularly sensitive,” Blayney said. “The reality is that women have suffered from stereotypes, both with respect to financial planning and in the financial planning profession itself. Realizing that these stereotypes still exist and how they have affected our approach to women is extremely important in coming up with a new, more empathetic and sensitive approach.”

Both Blayney and Kingsbury believe that financial advisors and firms should be working toward adopting more client-centric approaches that look at women as investors like any other, with their own financial goals to accomplish.

After all, pointed out Myra Rothfeld, chief marketing officer for Genworth Wealth Management, women today do hold 50% of the wealth in America, “so we can debate whether 50% is really even a niche market anymore.”

“In our view, every individual investor, whether a male or a female, has unique needs when it comes to financial planning,” Rothfeld said. “Each person is starting from a different point in terms of self-confidence, experience, point of view, although their financial goals—planning for retirement, securing financial futures for their families and so on—may be the same.”

Understanding women as individuals, then, means being able to cultivate the kind of deep, enduring advisor-client relationships that women value. Research has shown that women, because they’re still relatively new to financial planning, are less confident about how to do things right. Kingsbury believes advisors and financial planning firms should not only leverage the behavioral research that has been done on women’s attitudes to finance, but go out and work the terrain, so to speak, in order to really get to know different kinds of women, who they are and what they want.

“My advice to advisors is to think things through thoroughly, do the legwork and get out there and meet women,” she said. “What that does is part of being female and gives women a sense of self-worth.”

Advisors can put together focus groups made up of women, Kingsbury suggested, to get feedback on whether their approaches are working or not. She urged advisors to think about tailoring their approach to women on a regional basis: “The events you host in Boston should be different from the ones you host in Texas or Nebraska,” she said. “I even have had advisors ask their ideal female clients to go through their waiting room and ask them what they’d change by way of décor to be more appealing to women, because women notice details.”

More Than a Niche

Large companies like Prudential Financial may have an edge over other firms when it comes to reaching out to women because for more than a decade, the company has been conducting behavioral studies that offer a keen view of who women are and what they want.

“We have gained a great deal of insight into how women think, feel and behave with respect to financial planning with these studies,” said Pat Brzowzoski, director of diversity for Prudential’s women’s strategy. “By and large, the problem today is still that the women’s market is viewed as just one market, and our studies have shown us that there’s a real need for segmentation and viewing women not just as a single entity, but as a diversified group made up of many different entities.”

Prudential also places a great deal of importance on educating its sales force on the different niches within the women’s market by using the insight gathered from various studies.

“We’re able to really give our sales force the information and tools they need to hone in on different segments of the women’s market and understand the different demographics within the broader women’s market,” she said. “It’s an advantage to be able to give our sales force that kind of insight, and it allows for a far better, more targeted and effective outreach to women as they continue to become more important financial decision makers.”

Although many believe that women favor female financial advisors over male advisors, the research in this area has yielded conflicting results. All the same, female advisors do believe that it is important to increase their presence in the profession.

To that end, the CFP Board launched a targeted effort in May to draw more women into the financial planning profession, which included the creation of the Women’s Initiative Advisory Panel, chaired by Nancy Kistner, managing director and wealth planning solutions market director at U.S. Trust, Bank of America Private Wealth Management.

Currently, only 23% of CFP professionals are women. “I’m very optimistic about this venture, and I believe our profession is totally committed to bringing more women on board,” said Blayney. “I’m hearing from men and women all over the country that this is the right thing to do, so I believe the time has come and the momentum will only build up.”

We invite you to read all the articles and opinions in Investment Advisor's special report on Women in Wealth Management.

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