I have to admit that I’m not a big advocate of trying to attract more of one gender or another into a given profession, such as financial planning. Seems to me a better approach would be to work on removing any gender-based barriers to entry or advancement so that anyone who wants to be a financial planner (and meets professional qualifications) can succeed.
With that said, I do believe there is a growing body of evidence that independent advisory businesses would be more successful if they had more female financial planners. An excellent example of this is the TIAA-CREF Asset Management Survey (of 1,004 Americans at least 21 years old with $100,000 or more in investable assets, and who currently work with a financial advisor) released last June. It concluded, among other things, that “70% of women leave their financial advisors within a year of being widowed.” As we all know, women tend to live longer than men, which means firms that fail to build solid client relationships with both spouses face the prospect of very high turnover among their wealthiest clients.
In our work with advisory clients, we recognized this potential problem many years ago and actively work with our advisor clients to create and maintain great relationships with their clients of both genders, but especially their female clients — who, as the TIAA-CREF survey shows, are more likely to become alienated. Here are some of the things we encourage our clients to consider:
View couples as a target client market. We’ve found that at most advisory firms, failure to build strong relationships with women in client couples is most often a client service model problem. That is, if a firm has identified couples as one of its target client groups (and virtually all advisory firms do), then the firm needs to create a collection of services designed to meet the financial needs of that group.
What many firm owners fail to recognize is that male and female clients often have different needs, especially in the way financial matters are discussed. (Much has been written about these differences, including Eleanor Blayney’s “Directions for Women” project, and Cary Carbonaro’s book, “The Money Queen’s Guide: For Women Who Want to Build Wealth and Banish Fear.”) We highly recommend that advisors of both genders make an effort to understand the perspective of female clients.
Change the service model, not the advisors. Once they become aware of the different needs of male and female clients, many advisors of both genders try to adapt their style to meet the needs of female clients. While socially commendable, in our experience we’ve found that advisors are far more effective if they just try to be themselves. Some advisors (both male and female) relate better to men, while others relate better to women. We like to think of this as a matchmaking game: putting the right advisors with the right clients. That way, both partners in a couple will have an advisor with whom they form a bond.
Work with couples in teams. In our client firms, we use our “diamond teams” strategy: creating advisory teams consisting of one lead advisor, two associate advisors and one junior advisor. We find this strategy offers many advantages, including providing maximum leverage for the lead advisor, and invaluable client experience for associate and junior advisors. Because they include four advisors, diamond teams also create a high likelihood that one of those advisors will connect with each partner in a client couple. Consequently, we recommend that all advisors work with couples in teams, which might include both male and female advisors, but must include at least one advisor who relates well to women and another advisor who relates well to men.
(Read “Diamonds in the Rough: Reorganizing the Org Chart” for more on diamond teams.)
Embrace different approaches to personal finances. A big reason more advisory firms don’t have advisors who relate well to female clients is that many advisors are not comfortable with other advisors who approach financial advice differently from them. We have the same problem with some of our consultants: We find many of these same differences between our male and female advisory clients, and hire consultants who relate better to one gender or the other.