At a recent Barron’s Top Independent Advisors conference, an audience member rose to pose a question to me and my counterparts from other top custodians. “What are you doing to help advisors create a niche market with women?” he asked.
In a way, the question seemed irrelevant, a flashback to the 1970s and ‘80s. Yet the recurring statistics around how quickly widows fire advisors after their husbands die and surveys validating how poorly women in general are treated by so-called financial professionals make this a persistent issue even in 2012.
The question contained a nuance that I personally found most irritating: the reference to niche. How can a group that represents 51% of the U.S. population, according to the U.S. Census Bureau, be a niche? The U.K. Centre for Economic and Business Research found that in the U.K. there are more female millionaires between the ages of 25 and 44 than male millionaires. At some point in their lives, 80% of all women will take sole responsibility for household financial decisions, according to a June 2011 study by The Spectrem Group.
Further, women make up two-thirds of the U.S. workforce, and more than half of women with business-related degrees out-earn their husbands, according to Allianz’s “Women, Money and Power” survey, a fact that shatters the image of women as secondary earners. Finally, the Center for Women’s Business Research found in an October 2009 survey that the 8 million women-owned businesses in the U.S. have a combined GDP that exceeds that of the U.K., France and Italy.
The issue is not how to target or sell to women. The issue is that women investors want to be treated equally to their male counterparts.
It may surprise some advisors that women are just like people. They’ve accumulated their wealth through business ownership, high-paying jobs, inheritance, lottery tickets and yes, in many cases, divorce. More than half of all heterosexual marriages end in divorce, and many women fire their financial advisor within one year of this event. Advisors must recognize that their client couples comprise two individuals of equal importance; relationships must be cultivated with each, and often whatever the man thought made the advisor cool is not often shared by the woman.
According to a recent study sponsored by Pershing, “Women Are Not a Niche Market. They are a Significant Business Opportunity,” equal treatment does not translate to identical treatment. Because women and men often have different life circumstances, different degrees of financial experience and a different approach to communication, advisors may have to modify their approach to building productive relationships. Get to know your clients beyond stereotypes, which may require ditching some bad habits. (For a copy of the study, e-mail me or go to Pershing.com/women.)
Not too long ago, my wife invited me along when she went to purchase a new car. The whole experience was filled with atrocities, especially for a luxury car dealership, but one in particular involved the interaction between the salesman (they called him a sales consultant) and my wife. As we entered the dealership, he approached us, looked at me and asked if he could help. I told him that Arlene would like to buy a new car. He looked back at me and asked me which model she was interested in.
Of course, I knew this was the moment he lost the sale, but we continued to humor him for a few more minutes. Arlene had prepared well for this purchase and knew exactly what she wanted but had some questions. We sat at the salesman’s desk, and she began her inquiry. After each question, he’d smirk as if indulging her then look at me to respond as if we had some special male bond. It may have taken only three exchanges like this before I got the look from my wife that it was time to leave.