The majority of the nation’s wealth is expected to soon be controlled by women and if over half of those women prefer to receive financial advice from other women, then men- you’re in trouble. Although, the tide of female advisors is on the rise, it’s time to better understand what women want when it comes to financial advice.
In 2030, forecasters expect two thirds of the nation’s wealth to be controlled by women. This is due to a few factors, including women’s natural proclivity for longevity. Financial Advisor magazine notes that there is a high probability that women will become the “sole financial decision maker at some point in their lifetime.” In light of these turning events, it is beneficial to your practice to understand this emerging market better.
What women want
Reports show that 55 percent of women, ages 25-35 seeking financial planning advice would rather work with women than men. Other reports indicate that this isn’t just a younger female phenomenon; older women particularly want to work with other women. In fact, some sources indicate that 70 percent of women who are widowed leave their advisor within a few years.
The demand for female advisors is growing and while the financial industry would benefit from more women in the ranks, there’s substantial value in the inherent role of the advisor. There is something for all of us to learn in understanding why some women prefer to work with female advisors, beyond the question of gender.
“The ability to listen, communicate well, and make someone feel safe is not a unique trait belonging to just one gender.”
The psychology of women, like that of men, is unique and holds the key to retaining and gaining more female clients. The preference to work with female advisors, in some cases, lies in one’s natural ability to communicate and how that makes a client feel. “Many clients would tell me that I’d explain things in a manner that made them feel comfortable,” Audree L. Begay, named in the 2016 Top 100 Advisor list said. It’s no surprise that women desire to feel listened to, know that their opinions are valued, and have their fears understood. We all do, right? This, on many levels, is a basic human need that happens to be more defined by gender at times.
Using a familiar and archaic stereotype, if the husband played a more traditional role in managing the finances, it’s easy to see how the wife would feel overlooked and left out as a silent bystander in the advisor-advisee relationship. This is true for any couple you advise and like any relationship, it should not come as a complete surprise when it quickly fizzles once the primary decision maker is gone.
Retain more female clients
To deepen your relationship with female clients in particular, and all your clients in general, be sure to listen and communicate clearly. Meeting each client where they are and making them feel safe trusting you with their financial future is your primary task. Remember to cater explanations to your clients’ knowledge level and explain how various decisions could affect them in the future.
This focus on relationship building is likely to yield long-term trust, loyalty, and referrals. “Expanding relationships with women investors may represent advisors’ most important business growth opportunity,” said Jaylene Howard, consulting director for Russell’s U.S. advisor-sold business. “It’s clear that when they feel they are being heard and are on track to their investment goals, women are loyal clients who will often actively refer their advisors to family and friends.”
Editor’s Note: This post was originally published in March 2014 and has been reviewed and updated.