Advisors must better serve women, social media-savvy millennials

Women hold more than $5 trillion in investable assets and more than 90 percent of them manage home finances at some point in their lives. Yet women continue to be underserved by a financial services community that remains dominated by men and is male-centric in its outlook.

That’s the judgement of Sallie Krawcheck, a former Wall Street executive and owner of the professional women’s network Ellevate. Presenting the opening general session of the IMCA 2015 New York Consultants Conference in New York City, Krawcheck offered insights in the future of the financial services business.

The opportunities for advisors looking to build a female clientele are huge. Krawcheck said that women retirees now control about two-thirds of the investable assets held by men. And they live six to eight years longer than men.

But in Krawcheck’s telling, much of the advisor community is not adequately serving women because it lacks an understanding of their financial needs and concerns. Worse, she notes, many insurance and financial service professionals adopt a patronizing attitude toward women, believing them to be disinterested or inclined to defer to a male spouse on issues involving finances.

When women do engage an advisor, too often the relationship is an unhappy one. Women surveyed in studies, said Krawcheck, frequently indicate that their advisors failed to account for their financial priorities in planning engagements.  Upshot: More than 70 percent of the time, they drop their advisor for another.

“The irony is that women are more interested in seeking financial guidance than men are,” said Krawcheck. “But the financial assistance they’re getting is oft-putting.

“They’re not interested in outperforming the market, knowing where stocks are headed or learning about the latest products,” she adds. “And they don’t care about industry jargon like Monte Carlo simulations.”

Women are, in sum, not interested in being marketed to, but rather being served.  

And that means advisors need to be attuned to their financial priorities. Topping the list: securing downside protection against market dips and building a stable income stream that will last throughout their retirement years.

To that end, they desire holistic planning that accounts comprehensively for their lifestyle and financial objectives; and in respect to products, they’re looking for “curated” choices (i.e., a limited range of best-of-class solutions pre-vetted by the advisor on the basis of cost, risk, and performance).

A growing number of women, Krawcheck added, are also keen to invest in companies that maintain high environmental, social and governance (ESG) standards. These socially responsible investors are guided as much by the environmental sustainability and the ethical impact of an investment decision as they are by the performance of the product.