What do Affluent Women Want?

Hannah Grove, principal of HSGrove Private Wealth Consultancy, and her partner, Russ Alan Prince, president of Prince & Associates, Inc., have conducted extensive research on the affluent market, extracting important insights about the unique characteristics of today’s wealthy families. Through their studies, they have identified distinct differences between wealthy women and other investors–revelations that can help women advisors tap into this hard-to-reach market.

What are some of the key findings of your research on affluent women?

By and large, women get their money in one of two ways. They either earn it or get it from someone else through marriage or inheritance. It is the source of their wealth that plays the most significant role in how women view their money.

Women who earn their money have a physical and mental attachment to it. They typically own a business, are part of a family business, are a corporate executive, or have a professional practice. They want to be involved in decision making, but they don’t want to manage the portfolio themselves.

Women who inherit or marry their wealth tend to outsource their investment management by hiring a professional advisor. Interestingly, women who inherit or marry their wealth often have two to three times more assets than the women who earn it themselves.

Do affluent women have different personal goals and concerns than affluent men?

One thing that is consistent within the entire high-net-worth population is that they place a strong emphasis on their relationship with their advisor. They want someone who is caring and knowledgeable, who is interested in them personally.

For women, the advisor relationship is even more important. When we asked women why they fire advisors, an overwhelming majority cited deficiencies in the quality of the relationship. The advisor didn’t understand them, didn’t understand their goals, or didn’t contact them in the right way.

The other major difference we found was that while men are more likely to have a sincere interest in the market, the economy, securities, or investment products, women are generally less interested in this arena, making women more likely to use an advisor than a man. Women assess their own skills and interests against what they need and then go and find the right match. They take a very pragmatic approach to selecting an advisor. Men are more likely to think they can do it themselves. When surveyed, men admitted making spontaneous decisions and acting on hot tips that they hadn’t researched thoroughly. Conversely, women, because of lack of interest, lack of confidence, or their willingness to outsource, don’t tend to do those things. They are more likely to have a plan and stick to it.

What about investment goals?

The one investment goal that stands out is that, more than in any other population, women who marry or inherit their wealth are far more interested in socially responsible investing. They are more philanthropically inclined, which is an important opportunity for advisors.

Most advisors are so focused on gathering and growing assets that helping clients give their money away is anathema. So there is a great opportunity for advisors willing to help clients identify the right philanthropic vehicle and direct the investments within those vehicles.