Affluent women are more “advisor oriented” than affluent men, according to the latest Global Wealth Monitor from Phoenix Marketing International, meaning they’re more likely to let their advisor make most or all of their financial decisions for them, or to consult with an advisor regularly but make the final call on their own.
The survey identified three “pillars” that lead to higher levels of satisfaction in relationships between advisors and clients with $100,000 or more in investable assets: proactiveness, empathy and collaboration. These qualities were especially important to female investors.
“What we found pretty much across the board is that advisors have been able to form very strong relationships on each of those pillars,” David Thompson, managing director of the affluent practice for Phoenix, told ThinkAdvisor on Tuesday. “The difference is the willingness of the affluent women to interact with the advisor, to be engaged, to be less resistant to advice.”
The relationship between advisors and clients is “very dynamic” already, Thompson said, and “advisors who have been successful at creating those relationships generally have very loyal” clients among their affluent female clients.
For example, compared with male investors, women rated their advisors significantly higher on proactive qualities like following up quickly on requests, reallocating portfolios to keep them in line with risk tolerance and identifying problems or opportunities when they arise.
Taking time to understand a client’s needs, goals and risk tolerance was a key quality for female investors, followed by the ability to explain financial analysis clearly.
Women were much more likely to value collaborative qualities than men. Eighty percent of women rated their advisors highly for their ability to look at their entire financial picture, compared with 69% of men. Providing access to other professional resources or educational tools was also important to affluent female investors.
Thompson pointed out that the majority of female respondents in the survey were unmarried and were making financial decisions for themselves: 60% compared with 46% of men.
“That stat in and of itself is not important except that when you have women who don’t have a spouse to bounce ideas off of, they’re going to turn to other sources for advice.”
Part of that 60% of unmarried women includes widows, which Thompson said are a “very important statistic” for wealth managers working with affluent couples. “Let’s say they’ve been working with an affluent couple for 40 years, and the husband who may have been the primary decision maker passes on,” he said. “Now the widow doesn’t necessarily have a strong relationship with the wealth manager and may be looking elsewhere for assistance.”
He added, “It behooves wealth managers who have older clients to make sure they bring both spouses into the picture earlier rather than after the fact.”
The majority of women in the survey consult with an advisor either regularly, or for specific needs or events. Just 38% called themselves self-directed.
Men were less likely to consult with an advisor regularly but were more likely than women to go looking for specific advice. Almost half said they were self-directed.
Millennial respondents were more likely to call themselves self-directed than older investors, but Thompson said, “that’s not necessarily due to robo-advisors. It’s more that millennials are just wired differently and prefer to do a lot of their own research.”
Affluent women account for more than 9 million households and control about $6.9 trillion in liquid wealth.
Female decision makers were as likely to call themselves moderate investors as men, and only slightly more likely to say they were conservative: 29% to 22%. However, when asked if they would take calculated risks to make money, only half said yes, compared with 68% of men. More than a third said they were “always looking for new investment opportunities,” compared with 52% of men.
More than half of women had a primary advisor, but the survey found they were more than twice as likely as men to work with a full-service broker or investment company than an independent advisor.
“That follows the pattern of affluent investors in general,” Thompson said, due to the “strength of traditional wirehouses. They do a better job of marketing their services and generally offer more services than an RIA.”
Regardless of channel, women reported higher levels of satisfaction with their advisor than men. Eighty-six percent said they would recommend their advisor to others if asked, and the same percentage would ask their advisor first if they were considering new services or products.
— Read Where Are the Women in Finance? on ThinkAdvisor.