Globally, women are on track to control over $28 trillion in consumer spending by 2014.
So says a Harvard Business Review study, “The Female Economy,” published in 2009.
The study also finds the majority of women today (91%) control almost all home purchases.
Yet, women probably comprise little of your book, or have little to do with the planning process for your current family clients.
Studies consistently disprove the myths that women aren’t financially educated, or fail to seek advice. In fact, researchers find they take education seriously—with more women than men (2 to 1) taking part in learning programs. When it comes to retirement and real estate in particular, they’ve begun to seek professional advice.
And while statistically they still earn less than men for the same work, women are increasingly scoring better-paying jobs and outpacing men when it comes to post-secondary education.
StatsCan says 150,000 Canadian females attended university in 2007, compared to only 100,000 men. And, government statisticians say, women also are starting businesses at double the rate of men.
“The purchasing power of women extends to all areas, with wives, mothers and singles in control of most of the purchases for themselves, their parents and their families,” said Mike Aziz, vice president of sales at Desjardins Financial Security, during his presentation at the recent Distributors’ Summit.
So, he wonders, why are women falling behind when it comes to financial planning and investing? And more importantly, why aren’t more advisors actively pursuing women as clients? Those who aren’t, he says, are missing the next up-and-coming market.
The Harvard study, for instance, identified six potential client segments, based on income, age, and stage of life of women across the globe. They are:
- Fast-trackers: Ultra-wealthy women with valuable assets
- Pressure cookers: Upper-class women striving for further career and financial success
- Relationship-focused individuals: low-income women looking for growth, and protection of assets
- Women who manage on her own: middle-class singles looking for asset growth
- Fulfilled empty nesters: wealthy women with grown children
- Women who make ends meet: low-income earners looking for stability
Since the financial services industry has been identified as one of the main sectors with which women are most dissatisfied, advisory businesses should take note of who these women are and figure out their specific priorities.
Aziz suggests you also consider this: A McKinsey study found female employees are particularly skilled in eight key areas:
- external orientation;
- coordination and control;
- innovation; and
These characteristics not only make women great employees, but also great clients.They’re educated and driven, and will be proactive and creative when it comes to financial planning.
“Smart [and successful advisors] insist on family meetings,” says Aziz. “When clients get older, important decisions come up that affect all parties, such as deciding what to do with the family cottage, planning a retirement budget and choosing proper insurance coverage.”
Women often live longer than their husbands, for instance, and if you don’t establish a strong relationship with them, you may lose them as clients if their husbands die unexpectedly.
Additionally, single women’s assets are growing year-over-year. To date, the value of the Canadian female market is upward of $200 billion. Harvard’s study found single divorcees and widows are most in need of advisors.
Hiring more female advisors would help, Aziz says. While women currently account for only 19% of advisors around the world, that’s quickly changing. What’s more, companies are now under social pressure to improve diversity and promote more female employees.
“We tend to think like men or market to men in this industry, and bringing more women on board helps boost creativity in the workplace.
“You need to avoid groupthink, which is caused by having too many employees with the same experiences, backgrounds and ideas.”