A recent study by Fidelity Investments found that 70 percent of widows fire their financial advisor within one year after their spouse dies! Why would so many women dismiss the advisor who worked so diligently for their family, in many cases, for years?
The answer lies in the somewhat archaic notion that the man is in charge of the family’s finances and decisions surrounding insurance, annuity and investment products, and their spouses just go along for the ride.
Tapping the Female Niche Market:
Why should you care about female clients? Besides the obvious ethical reasons, there are some very compelling statistics related to female wealth (studies cited and referenced by Holly Buchanan in her book, “Selling Financial Services to Women” and by Kathleen Burns Kingsbury in her book, “ How to Give Financial Advice to Women”):
- 60 percent of the total personal wealth in the U.S. is currently controlled by women
- Over the next few decades, it’s predicted that women will inherit close to 30 trillion dollars in intergenerational wealth transfers. Because women are likely to outlive their husbands, women will control most of this wealth, plus, they will inherit their parents’ wealth.
- 57 percent of college graduates are currently women. Female college graduates are currently in control of more than 60 percent of the personal wealth in the U.S.
- 22 percent of women currently earn more money than their spouses.
- Women make approximately 80 percent of their family’s buying decisions.
- 89 percent of bank accounts are controlled by women.
- 28 percent of homeowners are single women.
- 45 percent of the millionaires in the U.S. are women.
- In 2009, 40 percent of private companies were at least 50 percent owned by women, compared with only 26 percent of companies in 1997 in that category. 20 percent of firms with revenue of at least $1 million are currently owned by women.
In short, women are earning more, inheriting more, and controlling more wealth than ever before. This is a huge, untapped niche awaiting every financial advisor, if he/she understands some key points about women’s needs and desires.
An advisor success story:
Scott, an insurance producer, engaged my mentoring services because he had two female clients move on to other advisors and he did not understand why this happened. I began our work together by explaining why women often become disenchanted with their financial advisors.
I explained “the psychology of women” and the key reasons women cite for changing advisors:
- “He didn’t listen to me.”
- “He was condescending toward me.”
- “He hardly looked at me or asked my opinion.”
- “I couldn’t trust him to consider my needs”
- “I felt overlooked and undervalued.”
- “I didn’t believe he really understood my fears and goals
We went over common myths that many advisors believe:
- women prefer to leave financial decisions to men
- women are too emotional and base financial decisions on their emotions at the time
- women are impulsive and may make financial decisions they later regret
Next, I coached Scott in the art of active listening, because women, in particular, often don’t feel listened to by men. (Active listening, the topic of another article, is a wonderful technique that will help you not only with your clients, but with any relationship you have.)
Scott spent three weeks practicing the skills I taught him and started noticing major differences in how his female clients resonated with his ideas and financial plans. In addition, Scott began to speak at women’s groups and divorced women’s support groups and by practicing my “first seven seconds” routine, brought in several high value female clients!