“Women’s initiatives” have become the industry’s hot dot, with many financial services firms identifying women as a growing "niche market," hosting “women’s symposiums,” creating ad campaigns aimed at women, or training their advisors on how to talk to women.
Most of these firms are going about it all wrong, said Eileen O’Connor, vice president of wealth management at McLean Asset Management and co-author of the Women of Wealth study. The study was commissioned by Family Wealth Advisors Council.
Many financial services firms are generalizing “women’s issues,” and treating women as a niche market, O’Connor said. But women are not a discreet class of clients. Just like men, their financial advisory needs differ markedly based on marital status, employment status, caregiving demands, life stage and net worth, according to the study, which surveyed 551 women, each with a net worth of $1 million or more.
“It would be silly to say you’re going after men as a niche market,” O’Connor said.
O’Connor believes the primary way firms are missing the mark is in their discovery process to determine the client’s goals and needs. According to O’Connor, 80 percent of women feel misunderstood by the financial services industry. It's hard to undergo a discovery process with someone who immediately suspects they are not being understood.
But firms and advisors are also falling short by not better using the softer skills, such as listening or being empathetic, she said.
Firms and their advisors need to understand each woman’s unique needs and tailor their approach and services accordingly, O’Connor added. “We’re trying to fit a square peg in a round hole,” she said. “One size does not fit all.”
During a webinar hosted by TD Ameritrade Institutional, O’Connor presented the findings of the study, including how various segments of women differ in what they worry about.
Married women said health challenges were their biggest worry at 96 percent. Fifty-seven of married women are worried about divorce, while one-third were concerned about the death of a spouse. In addition, one-fourth of married women said they didn’t feel comfortable calling their advisor on anything not directly related to their portfolio, including career advice, networking assistance, or life coaching. This is an indication that FAs are paying more attention to their husband, O’Connor said.
The top concern among working women was that their earning power will diminish or become obsolete, with 86 percent worried about that. This group of women was also worried about working towards promotion and transitioning back into the workforce after having children.
The “sandwich generation,” or women caught between two generations who need their support, said their number one issue over the next 12 months was providing for both their aging parents and children at the same time. Women lose more in earnings and are more likely to drop out of the workforce to care for another, and this was another big concern for this group.
Meanwhile, retired women were primarily worried about a decline in the economy, at 81 percent, and overpaying for major assets, at 51.9 percent.
Rather than trying to serve all these categories of women and their different concerns, O’Connor suggests advisors consider which category matches their skill-set and focus on that.
Statistics show women cannot be ignored; by 2030, two-thirds of the nation’s wealth will be in the hands of women, said Kate Healy, director of solutions marketing for TD Ameritrade. That includes $41 trillion, 71 percent of which will go to daughters, O’Connor said.
Take those statistics and throw in the fact that women are more likely than men to prefer working with an FA and more likely to rely on an advisor as their primary source of financial advice, and you have a significant opportunity for advisors.
