Different approach to planning can build relationships with female clients

One of the best ways firms can develop and maintain relationships with female clients is by having a strong presence of female advisors, a CIBC expert says.

Listen to the full podcast on AdvisorToGo, powered by CIBC.

Within the next five years, Canadian women will control $3.8 trillion worth of financial assets, said Carissa Lucreziano, vice-president financial and investment advice with CIBC. So building stronger relationships with female clients can also be good for a firm’s bottom line. 

“Firms that build client relationships with younger women, especially in the millennial range, could see up to four times faster revenue growth,” said Lucreziano. 

According to Lucreziano, female clients often prefer working with female advisors, and 80% of women switch financial advisors after becoming widowed or divorced. However, if a woman is engaged with their advisor and they have developed a strong relationship, a switch is less likely to occur.  

Female clients tend to appreciate a holistic approach to planning, Lucreziano said. Client needs have changed over the last decade, and client meetings are no longer centred around performance and products. Instead, advisors are focused on uncovering the needs and goals of their clients and implementing investment strategies over the long term. 

By taking into account certain factors that may impact a client’s ability to build wealth — such as career breaks, caregiver costs or retirement planning — female advisors tend to think about planning in terms of life goals rather than focusing on performance alone, she said.

They also often prioritize long-term relationships with their clients, which includes engaging the next generation, Lucreziano said. “This is such an important attribute in an advisor, especially for female clients who tend to think in the realm of their wealth, not just for what it means for them, but also what it means for the next generation.”

Female advisors may also appeal to female clients with their approach to investing, explaining how risk tolerance relates to financial goals.

That said, women are still underrepresented in wealth management. In Canada, Lucreziano said only about 15% of all certified financial planners at full-service brokerage firms are women. 

What that means for firms is there is quite a bit of opportunity, Lucreziano said. 

“You’re starting to see financial institutions work together to attract more women to the industry with programs, education and awareness,” she said. 

In recent years, there has been an increase in the number of women interested in investment planning. When it comes to taking action, though, Lucreziano said less than half of women have a plan in place.

She said advisors can close this gap by working with women to create a personalized financial plan and build a diversified portfolio, while also providing that source of education and guidance. “When women have a better understanding of their options, they’ll feel more confident in their plan and more prepared for what life may throw at them,” she said.

Women tend to be more patient, more diversified investors, Lucreziano said, and less inclined to dabble in risky or speculative investments. Women also tend to focus on long-term goals, she said, which puts them in a good position to earn higher returns. 

Developing that level of understanding is the key to helping clients build wealth, Lucreziano said. It’s the advisor’s role to encourage female clients “to take action on their terms.”

“The bottom line: female financial advisors are good for clients, and what’s good for clients is good for the business,” Lucreziano said.

This article is part of the AdvisorToGo program, powered by CIBC. It was written without input from the sponsor.