Attention Financial Advisors: Ignore Women at your Own Risk

Financial Advisors Ignore Women at Own RiskIf you consider women investors as a minor or secondary market, you are missing out on an important business opportunity. It’s time for a reality check. Women comprise almost two-thirds of the U.S. workforce, and more than half of married women with business-related degrees out-earn their husbands. Women also wield enormous influence as business owners. As of 2013, it is estimated[1] there are more than 8.6 million women-owned businesses in the United States, generating more than $1.3 trillion in revenues and employing nearly 7.8 million people.

If these statistics don’t convey any significance to you, then consider this: [2]Women control roughly two-thirds of annual spending in the United States, which accounts for approximately $12 trillion. Approximately 80 percent of women will be solely responsible for household financial decisions at some point in their lives.

According to the Federal Reserve, women control 51 percent of today’s wealth. By 2019, it is estimated around two-thirds of America’s wealthy will be female. Over the next 30 years, it is estimated women will be the primary recipients of between $42 trillion and $110 trillion of inherited monies – the largest transfer of wealth in history.

So why have you not focused on this emerging client base?

Women do not have a gender preference when it comes to the advisor they choose. They are more confident as an investor when working with an advisor, but they are looking for more than just an investment strategy. Women want collaboration with their financial advisor and are looking for customized solutions to meet their life goals.

To work with women, Kathleen Burns Kingsbury, principal of KBK Wealth Connection and author of How to Give Financial Advice to Women, suggests advisors get personal quickly through stories. Avoid jargon. Communicate using feeling and collaborative words. Be thoughtful, making them feel at home, from having magazines women like in the lobby to using technology like CRM, to never forget the kids’ names. Define the success of the advisor-client relationship to her as being “indispensable.”  Be a coach to coach them along the way.

“Women fire advisors for many reasons, but it usually boils down to a failure to listen,” says Kingsbury, “Many female clients complain about financial advisors not listening and try to sell them products and services before they really get to know them.”

Her advice? Listen carefully. Ask open-ended questions. Do your best to put yourself in the client’s shoes.

Like any potential client relationship, you need to build it. “Women are neurologically wired for connection. They get a biological boost from connecting,” Kingsbury says. “The pleasure centers in the brain light up when they do.”

Women want to tell their story as part of the financial planning process and they want to know something about you: your background, clients and what you can do for them.

Building a relationship also builds trust. “Women are slower to trust than men,” says Eleanor Blayney, president of Directions for Women, a Virginia firm which trains financial advisors to work with women. “They want to understand the context and how it affects those they care about. Unfortunately, financial services is a bottom line-oriented business, and many advisors are impatient with delays.”

Be consistently honest and transparent about your products and services. Transparency affords your clients the ability to know and trust what you are doing with their money on their behalf.

It’s also important to understand how women make decisions, which is different from men. Women tend to process more information, so their decision-making process is slower. Give women the time they need to make decisions and don’t pressure them before they’re ready.

Women have higher expectations than men regarding service quality. They are less likely than men to forgive poor service, but more likely to promote those who do it well. “I often hear complaints from female colleagues that a financial advisor was going to check on something, but then failed to follow up,” says Kingsbury. “For many women, such unreliability is unacceptable.”

If you have difficulty with follow-through, develop a support system. “Following up shows you care, that your client is important to you, and you are working on her behalf, even when she’s not in your office,” says Kingsbury.

Women are engaged and want to learn the financial business to take better control of their finances and future. You would be wise to engage these women – as they grow, you’re sure to grow.

For more information on Summit Brokerage Services, visit www.joinsummit.com or contact us at (800) 354-5528.

This blog and website are for informational, educational and discussion purposes only, and the owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site. Summit Brokerage Services, Inc., Summit Financial Group Inc., and any of their affiliated entities and principals are not a law firms or an accounting firms, or substitutes for an attorney or accountant. Although topics may be discussed on this blog that may involve legal, accounting, or investment issues, nothing on this blog shall be deemed to constitute the practice of law, legal advice, investment advice, and/or tax advice. Summit Brokerage Services, Inc., and its affiliates do not, and cannot provide any kind of advice, explanation, opinion, or recommendation about possible legal rights, remedies, defenses, options, selection of forms or strategies. The content on this blog is “as is” and carries no warranties.You should consult an experienced professional regarding tax consequences of specific transactions.

No reader should act in reliance on anything discussed in this blog without prior consultation with a licensed professional who is qualified to evaluate the reader’s individual facts and circumstances and offer an informed professional opinion with respect thereto. If any reader takes action or makes decisions based solely on the information on this blog without prior consultation with a qualified, licensed professional, the reader does so at his or her own risk and agrees that Summit shall have no liability resulting from such unilateral action or decisions by the reader.

Summit makes every effort to provide accurate and truthful information in its posts on this blog, but in no way expressly or impliedly warrants or guarantees the accuracy of its postings and/or the information posted here by others. All information is believed to be from reliable sources, however we make no representation as to its completeness or accuracy.

Summit may, on occasion, post links to information maintained on other websites. Such links and the information thereon are not under Summit’s control.  The mere appearance of a link to a third party site does not mean that Summit has undertaken a review or approval of the link and/or its contents.  Readers must treat information from third party links at the reader’s own risk, and Summit accepts no liability with respect to such third party information. Please note that the third party’s privacy policy and security practices may differ from Summit Brokerage Services, Inc., Summit Financial Group, Inc. and its subsidiaries’ standards. We assume no responsibility for nor do we control, endorse or guarantee any aspect of your use of the linked site.

 

[1] “Startup Phenomenon Women.” http://startupphenomenon.com

[2] Press Releases | Pershing.” http://www.pershing.com/news/Pershing

 

Stay Connected

Personalized Industry Newsfeed For You

Thank you. You are now subscribed.

Close