For financial advisors, mass affluent women who are saving and planning for retirement are among the top clients to target in 2018 and beyond.
In fact, nearly 50 percent of household breadwinners are now women, and women control a majority of U.S. household wealth -- $14 trillion as of 2015, and a projected $22 trillion by 2020.
These figures aren’t too surprising, given that more women now complete college than men, their average pay is rising, and they live longer. With lifespans five to eight years greater than men’s, many retired women also control significant family estates – and many soon-to-retire women will, too.
Given the risks of greater longevity, lower average retirement savings and potential caregiving duties, women’s needs can also be greater in some ways than men’s. And with fewer years to work and save, women with families need to make their money count in retirement.
Even so, only one in three women uses a professional advisor, and those who do focus primarily on investment recommendations rather than comprehensive retirement planning.[i] Yet women who do use a planner generate over 50 percent greater savings than those who don’t.
What’s the reason for the state of affairs?
“A lot of advisors are stuck in the 1950s,” says James Pollard, marketing consultant with TheAdvisorCoach.com. “You see a lot of relationships where a man is speaking for the entire household, and the advisors just aren’t serving the needs of the woman.”
Single or married, these women are looking for advisors who will address their concerns and help them plan for their futures – not their partners’.
“It’s not an untapped market, but it’s an open market, and it doesn’t make sense that advisors aren’t going after it,” says Pollard.
Networking and referrals
But tapping that market can be easier said than done, Pollard concedes.
“One of the biggest problems with serving these clients is finding them in the first place,” he says.
Especially for firms with male-dominated networks and staffs, it can be tough to make connections with female prospects.
“There are a few avenues, but none are going to be as effective as LinkedIn,” Pollard says. “You can find hundreds of high-earning women there and set up appointments.”
The online platform provides near-limitless connection opportunities, and a well-planned profile can clearly explain your qualifications, the problems you solve and the people you serve.
Beyond a specific platform, hiring even one female client works can become an avenue to meeting more.
“You soon get to a point where you’re not only working with women in an industry, you’re familiar with their companies’ retirement plans and benefits packages,” says Pollard.
Friend-to-friend referrals are also key, but to get them from women, you’ll probably need to ask.
“Women tend to talk about everything except money,” says Kate Stalter, co-founder and senior advisor at Better Money Decisions.
It may seem like a tough ask, but if you’re already providing value and receiving great feedback, it doesn’t have to be.
“Referrals are really the keys to the kingdom, but we see a lot of advisors who just don’t ask for them,” says Ellen Pierce, UBS Wealth Management managing director. It’s an industry-wide issue. If an advisor tells a woman they need some referrals, she’ll deliver.”
Once you have the attention of these prospects, you can make it clear how you can serve their needs.
“If I structure my profiles and marketing materials to make it obvious I work specifically with high-earning female executives, for instance, that audience will be more comfortable working with me,” says Pollard.
How much, if at all, should your messaging change?
“Your overall marketing tactics don’t need to change – your message just needs to be tweaked,” Pollard says. “Men tend to be bigger risk-takers, and women tend to invest more in index funds, so the financial advisor who presents him or herself as more conservative and diligent may appeal more.”
Marketing materials aside, it also pays to promote your expertise by educating potential clients.
“Talk about what’s important to women,” says Stalter. “I write a column for a local newspaper, and it’s gained me a lot of attention because I’m able to address some of these very real planning decisions they face.”
Not every advisor will get a newspaper spot, of course, but there are plenty of other ways to sell by informing: blogs, LinkedIn posts and articles on your business’s website, to name just a few. When speaking to an audience that is often condescended to, no-frills informational content is a great way to build trust.
To that end, educational events can also work in your favor.
“We do lots of seminars, open to the public,” says Stalter. “Most of our attendees are women who are interested in financial education. That’s not to say men aren’t, but because of their longevity, women are also apt to be interested in these events.”
Ultimately, attracting an audience of mass-affluent women is similar to targeting any audience – the more you generalize, the less specific appeal you’ll have.
“If you’re a generalist who ‘works with anyone,’ it’s actually going to be harder,” says Pollard. Consider, then specializing in the specific needs of mass-affluent women – and that if that’s your target, you’re going all-in on it. Subspecialties, such as working with widows and/or divorcees, can also be useful.
Women on staff
For better or worse, people tend to buy from those who are similar to themselves – one big reason why having female advisors within your firm can only help boost your female clientele.
“There’s no question it makes a difference, and women tell us they come to us for that reason,” says Stalter.
Whether or not you should you bring on female advisors for the sake of marketing to women will depend upon your firm’s size, your current and future needs, and if you were already looking to hire. “If you have people on board who already have the capability to market to women, that may be more cost-effective,” says Pollard.
Still, diversifying a homogenous firm can improve your bottom line in more ways than one.
“The most effective teams are diverse because different people hear things and process things differently,” says Pierce. Hiring people of different genders, ages, ethnicities – not to mention different ways of thinking – can ultimately improve client outcomes, in addition to growing your appeal among different demographics.
Selling solutions, not investments
As with any demographic, appealing to mass-affluent women can be just as much about the “what” as the “how.”What exactly are you offering, in other words, and how does it meet the needs of your target audience? People, after all, really buy solutions, not products or services. It’s up to you to communicate how your expertise can meet the challenges of a woman planning for retirement.
“We focus on problem-solving,” Stalter says. “’Your investment philosophy is important, but it’s kind of the easy part. Women generally think about planning and the longer-term picture, but the way financial services are marketed to men tends to gamify things.”
Pierce likewise notes that “a lot of advisors keep their conversations very surface, and they don’t provide the solutions women are looking for. What do they want to do after they’ve left work – travel, give to philanthropic organizations, leave legacies for their grandchildren?”
If anything, focusing on goals and steering clear of investments and returns is an advisor’s best chance at earning business from female clients. Smart financial plans aren’t exclusive to any one gender, and timelines can be adjusted based on differing life expectancies. What matters is the lifestyle, longevity and security those plans provide.
Trust and chemistry
In a field where so much is at stake and so much personal information is shared, chemistry and well-established trust are key to client appeal. “You need to know, like and trust your advisor, and I think this all comes down to personal chemistry much more than people in this industry like to admit,” says Stalter.
Your personality probably won’t change. Trust, on the other hand, can be built up front by listening, demonstrating your understanding of the client’s needs.
“Don’t assume you know what their answers will be,” says Pierce. “With this demographic, ask, listen and really find out what’s important to them.”
[i] A Comparison of Retirement Strategies and Financial Planner Value, 2014. https://www.onefpa.org/journal/Pages/NOV14-A-Comparison-of-Retirement-Strategies-and-Financial-Planner-Value.aspx