I’ve been working to help educate financial advisors on the needs and considerations of women clients for over a decade.
I’m thrilled to see more financial firms and advisors gain awareness of their unique considerations, but we’ve still got a ways to go in ensuring that all clients are understood and nurtured appropriately.
Today offers you a great opportunity yet to take the lead in earning the trust and respect of all of your clients, empowering them to make the right choices for their own lives, whether they are working on long-term care (LTC) planning, retirement planning, or any other type of planning or risk-management effort.
Here’s what you need to know to get started:
The backstory and stats
Up until now, the industry has by and large looked upon women as a niche market- inferior to ‘the real market’ they’re after. But women are in fact the real market just as much as men in today’s world, given their unique positions within modern American families and their longevity.
The Harvard Business Review reports that private wealth in the United States is expected to grow from some $14 trillion to $22 trillion by 2020 and 50 percent of it will be in the hands of women (“The Female Economy”, 2009).
We spend about $5 trillion annually, over half of the U.S. GDP according to a recent report by She-economy; 29 percent of us out-earn our husbands (U.S. Bureau of Labor Statistics, “Women in the Labor Force”, 2013); and 95 percent will be the primary financial decision maker in our families at some point in our lives (“Financial Experience & Behaviors Among Women”, 2010-2011).
Yet the financial advisory industry doesn’t yet reflect these and other gender changes that have occurred within our higher educational system, workplace and homes. For instance, only 31.2 percent of personal financial advisors today are women (U.S. Bureau of Labor Statistics, “Women in the Labor Force”, 2013). More foreboding for the industry as a whole, a staggering 73 percent of women polled cite their dissatisfaction with the financial service industry above all others (The Boston Consulting Group, “Women Want More”, 2009).
No matter where they reside, what their occupation is or how much personal wealth they have accrued, women consistently share with me the same frustrations towards their personal financial advisors: ineffective communication; a lack of sensitivity to their objectives; and a condescending demeanor.
Women show an alarming lack of enthusiasm and loyalty to their financial advisors, with every major financial firm documenting their distrust of the industry in one form or another.
For instance, a staggering 69 percent say they don’t view their financial advisors as their go-to source for information (Allianz Life, “Women, Money & Power Study”, 2013).
Feeling misunderstood and even inferior, it’s little wonder that women are more likely to funnel their money into checking and savings than to work with an advisor to put their money to work for them in the right financial products and investments.
I’ve personally witnessed advisors all but ignore female spouses in their offices, instead speaking directly to male spouses with the inaccurate notion that they are the ones who must be targeted with the information, game plan or product. Many women want to full digest information before making a final decision…and who can blame them? After all, they will be left holding the bag long after their spouse is gone.
With changing demographics, your clients may include more single women, divorcees, two-earner couples and widows than ever before. Given that the chances are very high that women are behind the financial decisions that take place outside of your office walls, you have the opportunity to get out ahead of others by seizing this momentum shift.
By addressing women’s unique concerns, goals and preferred communication, you can both grow your own business and offer the best insight to your clients… no matter their gender.
Women are smart cookies when it comes to understanding their acute needs.
Because they live longer than men, remain single longer in today’s world, and may find themselves financially vulnerable after a divorce, women by and large are well aware of the hurdles they face (Department of Economic and Social Affairs, “The World’s Women”, 2010).
As an example, I’ve been doing my own un-scientific survey of audiences at my speaking engagements for a decade now.
When I ask through a show of hands how many believe the government will help to provide them with future long term care services (one of the highest expenditures anyone will face), very seldom does a woman raise her hand. By contrast, many men often do, misbelieving that Uncle Sam will help them.
Connecting the dots
Like many, I believe that the time is ripe for more female financial advisors to enter the field.
But that doesn’t mean there isn’t a place for all of you male financial advisors.
While some women do specifically seek out female advisors, by and large most are simply looking for an advisor- male or female-, who considers their unique perspective, affords them the respect that every client deserves and works with them accordingly.
If you learn to focus on both genders appropriately, you’ll soon discover what some of the best advisors have long known: women are referral machines! But you have to foster a strong relationship with them to earn their trust. Learn their preferred communication method and educate all of your female clients (single, widowed or married) on their current and future financial needs. Then offer them guidance in terms that makes sense to them, being sure to listen carefully to their input and answer their questions thoroughly.
By doing this, you’ll also earn the added trust of your male clients who will be thankful you’ve thought of things even he might not have considered. You will empower not only this fast moving segment of the financial market that, until now, has been largely underserved but also the families behind each and every client you’ve earned.