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Surprise! HNW Women Want Investment Performance From Their Advisors

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Freud apparently never found an accurate answer to his oft-quoted and exasperated query “What do women want?” But a new survey from Schwab Advisor Services (SAS) provides insight into what women want from their advisors: investment performance.

The largest RIA custodian’s first Women and Financial Independence study, released Thursday, found that among 500 HNW women (defined as having household investable assets of at least $1.3 million), a majority—58%—said that having “continuous, good investment performance” was most important to them, followed by “having a long-term financial plan,” at 38%, while “having short-term financial gains” was picked by only 1%.

Neesha Hathi, senior vice president of advisor technology solutions, Schwab Advisor ServicesIn an interview Thursday relating the first of the findings on the study, the SAS senior vice president of advisor technology solutions, Neesha Hathi (left), suggested that women investors are not that much different than men when it comes to the expectations they have of their advisors. “Women do care about the relationship and planning” aspects of their advisor engagements, she said, but “they care about performance just like their male counterparts.”

Other findings in the study support the contention that both married and single women want a “collaborative relationship” with their advisor, even when they might not be the key financial decision maker within a couple. Women don’t feel, Hathi said, that “I want to do this myself.” Instead, they feel “I want to do it with my partner to get the best results.” The study found that 88% of the respondents “wanted a say” in how their money is invested (75% of the respondents said they currently have an advisor).

That was one of the key takeaways from the study, Hathi said, suggesting that advisors should reconsider how they treat women as clients. “Many advisors focus on the relationship” when it comes to women clients, whether they be single or married, but the study found that women “want to be involved in the investments.” Further, the findings support the fact that women don’t constitute “some homogeneous population,” Hathi said, but instead are members of “a hugely diverse swath of the population.”

Among other key findings, almost 90% said they were indifferent as to gender of their advisor, Hathi pointed out, which “gets back to performance, and what any investor would care about.” Speculating on the findings, Hathi admitted that such agnosticism regarding their advisor’s gender might be due to female investors “not having much experience working with a female advisor” and said that at least anecdotally, Schwab found many of the RIA firms that custody with SAS are more interested in recruiting women into their firms. That’s due partly to a desire to bring in more female clients, but also, Hathi said, because “they recognize that diversity in their firms will help them serve all their clients more effectively.” The survey was conducted among 500 HNW women ages 30 to 70 between May 25 and June 4 by Koski Research.

Other findings of note from the study include that of those who said they had an advisor, 37% said they made the decision to hire an advisor jointly with their spouse or partner, 25% said they made the decision themselves and 21% said their spouse or partner made the decision. Of those women who are married or have a partner, 82% said they want advisors to direct conversation to both spouses equally. On referrals, 76% of respondents with advisors said they would refer their advisor to someone else.

Hathi said that as a technologist, she was particularly interested in another finding of the study: that “face time” is critical among these high-net worth women in establishing trust with an advisor. When an in-person meeting with their advisors isn’t possible, regardless of their age women voiced a preference toward speaking by phone with their advisors over other electronic communication means.

“Technology can only take you so far,” Hathi said, arguing that “it’s not a replacement” for the in-person relationship. 

Of these HNW women, 65% considered themselves financially independent, with Hathi noting that of the respondents, 49% of married women had their own individual investment accounts, separate from their retirement accounts. That, Hathi said, indicated “a paradigm shift—women are generating wealth now,” whereas in the past they may have been more likely to become wealthy through inheritance, divorce or widowhood.


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