Advisors fundamentally misunderstand female clients, and the result shows up in client satisfaction statistics: 73% of women say they’re unhappy with the industry, says a report by Strategy Marketers called Financial advisors are failing women.
Here are 4 misconceptions that lead to missed opportunities for both advisors and female clients.
1. Women are a niche
Advisors are treating women as a niche market, and they “fail to recognize that their firms’ future success depends not only on attracting women but also on developing a strong female-friendly brand.” In fact, 87% of women looking for an advisor say they can’t find one they can connect with.
Men are twice as likely to be prospected by an advisor, the report says. Further, 50% of women with $250,000 or more to invest say men get more attention, better service and better terms from their advisors.
What not to do: Don’t focus on rates of return while ignoring your client’s other needs. Build a well-rounded relationship.
2. Men have more money to invest
Women control nearly a third of all wealth in North America – including $1.1 trillion in Canada. And nearly half of those with $500,000 to invest are women.
Women in heterosexual relationships are also more likely to outlive their husbands, meaning many will inherit substantial assets when their partners die – as much as 67% of all assets by 2020. But the male partner is more likely to be an advisor’s main contact. When the husband dies, 80% of women switch advisors within a year.
What not to do: Don’t automatically prioritize husbands or expect he has the final say on financial matters. Don’t overlook single women as prospective clients.
3. Women are risk averse
Women aren’t more risk averse than men, but they may appear so because they tend to ask their advisors more questions than men do, says the report.
What not to do: Don’t use brochures or marketing materials that admonish women for not taking on enough risk to meet their financial goals.
4. Women aren’t interested in investing
The researchers interviewed women and heard from 60% of them that they were always interested in investing. Of those with a partner, 51% said they were either the main financial decision maker or made decisions alongside their partner.
What not to do: Don’t tell female clients, “Don’t worry, I’ll take care of it.”
Listen to one of the report’s authors, Judy Paradi, partner at StrategyMarketing.ca, talks about her findings at the University of Toronto’s Rotman School of Management.