It’s no great secret that advisors frequently lose women as clients after they divorce or when they become widowed. The bigger secret is figuring out how to make them stay.
It comes down to this, according to Eileen O’Connor (left), a vice president of wealth management at McLean Asset Management of McLean, Va.: women need more education and validation than men to make financial decisions, and they can easily detect whether an advisor is really listening to them.
“Advisors complain about this a lot,” O’Connor said Monday during a TD Ameritrade Institutional webcast, Crack the Code: Working With Women of Wealth. “But I remind them, ‘It’s your responsibility as the advisor to be sure she understands. If she keeps asking questions over and over, she’s not challenging you; she’s trying to understand.’”
Case in point: “Lillian” was recently left with a significant estate when her husband died unexpectedly, O’Connor said of a new client she recently signed on. When Lillian phoned her husband’s wirehouse advisor, Bob, she knew that her husband had “a cordial relationship but not a big comfort level” with Bob.
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“She reached out to Bob but was left with the feeling he was on another planet,” O’Connor recalled.
‘It’s OK to Ask Emotional Questions’
“I have found the value in asking really powerful questions,” O’Connor said. “It’s OK to ask, ‘What makes you feel most comfortable and productive in meetings?’ And it’s OK to ask emotional questions: ‘I notice that you are not as upbeat as you normally are, can I ask why?’ I find that clients appreciate advisors asking those questions, and it gets easier asking them over time.”
In Lillian’s case, she contacted her husband’s former human resources director and asked for the name of three advisors to interview. O’Connor was the only one who responded to Lillian’s email by saying, “I’m so sorry to hear about the loss of your husband.”
It was that small act of human kindness that persuaded Lillian to give O’Connor her business.
When Lillian met with O’Connor, she spent the entire first meeting asking Lillian questions and letting her talk. In their second meeting, O’Connor worked with Lillian on a to-do list, and then over time she created a straightforward sheet that showed Lillian’s assets and a simple cash flow report to reassure Lillian that she would be all right.
To be sure, that kind of reassurance can pay off for an advisor. Kate Healy, a TDAI director and webcast moderator, noted that at least two-thirds of the nation’s wealth will be in the hands of women by 2030, and O’Connor added that an increasingly significant portion of generational wealth transfer now goes to daughters. In short, both said, these factors represent a phenomenal opportunity for advisors. ”The financial industry’s process problems are in the discovery process, and 80% of women don’t feel understood,” O’Connor. “It’s not about technical expertise. It’s about softer skills.”
The Vast Majority of UHNW Women Use an Advisor
Perfecting those soft skills can certainly pay off for advisors: The higher the net worth, the more likely women are to work with advisors, O’Connor said, pointing to two facts: only 5% of ultrahigh-net-worth (UHNW) women don’t use an advisor, and studies show that women are less price-sensitive than men when it comes to paying for services.
Key findings from a women of wealth study commissioned by the Family Wealth Advisors Council confirm an increase in the number of women controlling the United States’ investable assets. Of 551 total participants, with 70% married, 14% divorced, 9% widowed and 7% single, nearly 50% of HNW women were employed full time.