More than 70 percent of women surveyed reported low or moderate satisfaction with their financial advisors, according to a study by Russ Alan Price and Hannah Shaw Grove. In other words, three out of four wealthy women are looking or thinking of looking for a better financial advisor, said Susan Hirshman, a former advisor and author, who spoke at the Investment Management Consultants Association’s conference in New York Monday. In addition, the average number of years a woman stays with her advisor after becoming a widow is less than one year.
Today, it’s becoming more important for advisors to target women. In fact, a recent Merrill Lynch survey found that affluent women are more concerned and less confident about retirement than men. And these days, women control 60 percent of the wealth in the U.S., according to the Boston Consulting Group. During her IMCA presentation, Hirshman, author of Does This Make My Assets Look Fat?, gave advisors some helpful tips on targeting women.
So, what do women want? According to Hirshman, when it comes to financial advising, sources of satisfaction for women include the quality of the relationship; intrapersonal, relationship-driven factors; and chemistry. And yet, the two most common questions women ask her are “How do I know my advisor is doing a good job?” and “How do I choose an advisor?”
Women don’t want you to take them for a day at the spa, Hirshman said. But they do want an advisor with good listening skills, which is key to chemistry. While women typically nod their heads when they are listening, this doesn’t mean agreement. It just means they’re following what the person is saying and are attentive, she said. Meanwhile, men tend to sit still when they listen, but to women, this looks like they’re not engaged or are bored.
“How do you engage?” Hirshman suggested nodding your head or saying ‘uh huh’ every once in a while, to let the woman know you’re listening.
Another key to chemistry is problem solving. For example, when you ask a woman, ‘What do you think?’, this is all about discussion, Hirshman said. They don’t want to give an answer; they hear the question as an invitation to talk. Men, on the other hand, think with a singular purpose. “This is nature,” she said.
Chemistry is also about understanding the client’s goals. When it comes to money, a man’s goal tends to center around the hope for more riches, while a woman tends to crave freedom from fear of poverty, she said. That said, some women are motivated by the prospect of greater wealth. This dynamic can help the advisor to understand the client’s goal better, as those who desire great wealth are typically more willing to take downside risk, while others are not.
“Do women require more hand holding?” No, Hirshman said. But knowing how often or how seldom to be in touch is another factor in creating chemistry. Some women need a lot of contact; some don’t. But most feel like their advisor doesn’t want to spend time educating them, she added. Typically the advisor’s answers to questions are short, or the advisor says he already answered that question.
“They fear asking questions.”
Lastly, motivating women to take action in the management of their own wealth is important. Married women often tell her, “‘If only I knew how aggressively he was invested, we wouldn’t have been invested this way.’” While both men and women can be convinced to adopt certain investing strategies or planning ideas if a financial advisor uses facts, figures and careful logic, women also tend to place high emphasis on their own personal experience and the experience of others.