A: I suggest that women focus on two areas beyond an advisor’s qualifications, like licenses, speciality areas and fee structure:
1. Knowledge on women specific issues. As compared to men, women generally have lower workforce participation, lower pay, longer life expectancy, lower risk tolerance and confidence levels, and often end up being the main caretaker for children, elderly parents and the spouse.
(You can read more about some of these differences in the recently released findings of BlackRock’s first ever Global Investor Pulse Survey). Women would want to look for an advisor that is knowledgeable about the impact of these issues on income, savings and investments. To gauge this, women investors can look at advisors’ marketing approach and materials, as well as ask upfront if the advisor has any concrete strategies to tackle these challenges.
2. Interpersonal approach: Key for a lot of women is an advisor who seeks to personally understand her needs, focuses on her overall longer–term financial picture, and together with partners, such as accountants, is able to offer quality comprehensive financial planning.
A clue of a more inclusive approach is that an advisor brings both spouses into the financial planning discussions, and coaches the woman by, for example, asking open-ended questions. In addition, a collaborative advisor is available and approachable for questions, is appreciative of women’s general interest in learning through group discussions and is able to provide ongoing education, such as through seminars and research communications.
Sources: Studies linked to throughout the post.
Nelli Oster, PhD, is a Director and Investment Strategist in BlackRock’s Multi-Asset Strategies Group. She holds a BSc (Hons) in Management Sciences from the London School of Economics and a PhD in Finance from the Stanford Graduate School of Business, where her dissertation focused on behavioral finance.