“It’s time to change the conversation” about women and advisors, argues Kim Dellarocca of Pershing LLC. In a media conference on Tuesday, the Pershing director noted that not only do women represent a “crucial client opportunity” because of their control of household financial decisions, but also because of their expressed dissatisfaction with those advisors with whom they already work.
The opportunity and the threat are explored in a new guidebook for advisors published by Pershing called “Women Are Not a ‘Niche’ Market,” and was the subject of the gathering which, in addition to Dellarocca (left), known for her practice management acumen at Pershing Advisor Solutions (see previous AdvisorOne interview with Dellarocca on advisor succession planning), featured a presentation by the author Susan Hirshman. The guidebook is the first of three reports to be published by Pershing on specialty markets for advisors, and is meant to help advisors “secure and service women clients at every stage of their lives.”
Dellarocca cited a number of research findings, many from the Sullivan Trust Study on which the guidebook is based, that place the opportunity and threat in stark relief:
- Women comprise 60% of the working population in the U.S.
- Forty percent of working women outearn their husbands, and more than half of married women with business-related degrees outearn their husbands
- Women control roughly two-thirds of annual household spending, or about $12 trillion
- Eighty percent of American women will be solely responsible for their household finances at some point in their lives
- Only 49% of women said their advisors focused on “making me a smarter investor,” compared with 60% of men
- Only 57% of women said their advisors “clearly articulate the downside risk of investments,” compared to 66% of men
Hirshman, a former JPMorgan advisor and executive who has written extensively for Investment Advisor and for the Wealth channel on AdvisorOne, recently completed a yearlong tour in which she presented the findings of her book, “Does This Make My Assets Look Fat?” which is intended to give women of every station in life an understanding of the investing world. Many women, said Hirshman, only become involved in their finances and those of their families after a life-changing event such as the death of a spouse, a divorce or a layoff. Too many women, she said, are “If-onlys,” which she defined as those say after that life-changing event, “If only I had paid attention” to their finances and the investing world before they were forced to.
To help overcome many women’s lack of confidence in the world of financial services—not a lack of ability, Hirshman pointed out, they need only break down what they need to know to four areas: what is their current financial status; where do they want to go with their finances; what’s the plan they need to reach those goals; and how to assess how well the plan is going.
Realizing that “the industry has not done a great job of communicating what investing means,” Hirshman saw the need to “translate investment-speak into a language women can understand,” which is why her book is presented in the form of a diet plan.” With the understanding of those four areas, and with greater confidence in how investing works, women can be given the power to judge the value of an advisor, Hirshman (left) said.
(See this prior AdvisorOne article on Hirshman, her book and how advisors can better serve women clients in retirement.)