The key to developing strong, long-term client relationships that lead to referrals and asset growth lies in helping clients feel that their total wealth, in all its forms, is protected. Clearly, that’s hardly a top-secret formula, but many advisors often overlook the full wealth picture.
Clients tend to envision their wealth holistically. For most, wealth is a mix of financial assets — stocks, bonds, mutual funds, and annuities — as well as homes and other properties, businesses, cars, boats, jewelry, artwork and sometimes even their baseball card collection.
Whether the risk is running out of money in retirement or water damage to their home, clients want their financial advisor to be looking out for them. In fact, a recent study by Chubb found that 77% of successful clients expect their financial advisor to understand their property and casualty risks, even if the advisor is not an insurance expert. But the same study found that only 28% of financial advisors currently have that understanding.
Yet female advisors tend to look at wealth holistically. A 2018 Cerulli study found that female investors tend to mention specific financial goals when discussing investment objectives, whereas male investors are more likely to say that outperforming the market is their top priority.
That may be because women usually look at life through the prism of family and seek to insulate family members from risk. Regardless of the financial decision — buying a house, planning for a child’s education, saving for retirement or caring for elderly parents — protecting family members is usually top-of-mind when women think about money.
Additionally, according to a 2017 report by the consulting firm EY, women investors view achieving their personal goals, which typically include the protection of family members in the broadest sense, as more important than even investment performance.
While female advisors are just as interested in investment performance as male advisors, what often differentiates them is their 360-degree view of wealth management, with its concern for risk identification and mitigation.
This holistic approach supports the development of lasting, long-term advisor-client relationships and the positioning of the advisor as a “financial quarterback” — which is important to 85% of clients, according to Chubb data. The good news is that all advisors can adopt this approach.