- 3-Minute Article
- Jun 01, 2017
How to Reach Out to Female Clients and Why it’s Important
Insights that could help you recruit and retain more female clients.
Women are controlling a greater amount of personal wealth than ever before. That figure stands at $14 trillion today1 and will grow to $25 trillion by 2030.2 In the United States today, nearly four women in 10 earn more than their spouses.3
Women are also living longer and healthier lives,4 with more active and independent plans for their retirement than previous generations. As a financial advisor, you can play a big part in helping create these plans, but many female clients feel advisors don’t anticipate their needs.5 So how can you make yourself and your business more relevant to what women want?
We’ve looked at three important ways female investors differ from men and how you, as their advisor, might consider adapting.
1. What women look for in an advisor
A majority of women value professional advice, but experience difficulty finding advisors they trust. Research shows that most women consider it either 'extremely' to 'very' important for an advisor to educate and explain, to listen to what they want, and to take the time to build a rapport with them.6
We spoke to Cathy Weatherford, the author of Women & Wealth and CEO of the Investment Retirement Institute. She recommends you take the time to get to know female prospective clients before talking about money.
"Don't force a cold dive into the financial waters when you’re working with a woman," she says. "Begin with a warm conversation to get to know her, and understand her wants and desires from financial planning. Then it's a lot easier.
Cathy says she used this approach when choosing her own financial advisor: "He talked to me for almost two hours before we ever discussed money.
2. How women think about financial goals
Women may have similar financial goals to men, but the way they think about those goals is different in two ways that are essential to understand when helping female clients choose the plan to best meets their needs.
First is that women tend to place greater importance on financial security. Both women and men consider saving for retirement and saving for an emergency fund their top priorities, but women are more likely to consider them 'extremely' to 'very' important.7
Second is that women are less confident of their financial knowledge and are less likely to have a saving plan in place. Only a fifth of women agree strongly that they are 'comfortable' about their financial knowledge, while 6 in 10 do not have a plan to save a fixed amount.8
"Data shows people who work with financial advisors end up saving more and have higher levels of confidence,"9 says Cathy. “There are significant opportunities for advisors to help women prepare for retirement, grow their wealth and become better financially protected."
You are uniquely positioned to give your female clients the confidence to achieve the financial security they are looking for.
3. How women think about risk
Women are generally less tolerant of risk than men10. Given an imaginary scenario where an investment falls quickly in value, only 12% of women said they would buy, compared to double the percentage of men.11
An annuity is a good lower risk investment that, as you know, also provides financial security through a fixed income. In spite of this, Cathy says she encountered resistance from some financial advisors when she was looking for an annuity, with the majority trying to convince her that they could get her a better return on her investments with riskier products.
"I think there's a lot of education that has to happen in helping clients understand the value of an annuity as part of a modern investment portfolio," she says.
We are seeing an unprecedented shift in the importance and financial power of American women. This is a trend that is only going to gain momentum in the decades ahead, creating a huge opportunity for advisors who are ready to adapt to the needs of female investors.