How Advisors Can Strengthen Relationships with Women Investors

Women investors act differently than their male counterparts, so financial investors should consider actionable tools that ensure retention and drive acquisition with female clients.

On the recent webcast, Women & Investing Lessons for Success, Jennifer Tarsney, Director, Practice Management, New York Life Investments, highlighted a recent survey of 800 women with over $250,000 in investable household assets to understand better the issues and perspectives female investors have when making an investment decision.

“What we found is that women are often the CFO’s of their household, really having major control over household spending, but when it comes to investments, they are not nearly as comfortable,” Tarsney said.

New York Life Investments found that 62% of those surveyed revealed that women have unique investment needs and challenges that our industry doesn’t necessarily understand or address. For instance, 40% of women feel financial professionals treat women clients differently, 36% feel patronized by financial advisors, 30% feel financial advisors are less likely to listen to investment ideas from women, and 28% feel financial advisors push women out of financial-related conversations.

Meanwhile, women may also treat financial advisors differently when compared to male investors. Among those who have changed advisors over the past year, only a third did so due to poor performance. Tarsney pointed out that the rest fired their advisor due to client experience issues, such as a lack of a personal relationship, lack of trust, poor communication, or service – items that are entirely controllable from the advisor’s perspective.

When looking for a financial advisor, women also highly rated unquantifiable characteristics beyond knowledge about investing. For example, women selected financial advisors who take their concerns seriously, treats them with the respect they deserve, and takes the time to understand specific financial needs.

“Making that quick personal connection is just as important as proving your investing and planning expertise,” Tarsney said.

Women also don’t care about the gender of their financial advisor.

“To the majority of women, it’s not the gender that’s important, but rather the soft skills that will allow them to feel more comfortable in dealing with their advisor,” Tarsney added.

Building Better Relationships

As a way to help financial advisors build a better relationship with women investors, Tarsney highlighted five skills that many women investors tend to hone in on, including Empathy or the ability to understand and share the feelings of another since women clients want their advisor to take an authentic interest in them; Integration/Financial wellness or women clients want their advisors to help them with their full financial picture, not just pick investments for them; Alignment or women clients want advisors to prove that they are on their side, that they have their back, that they only have their concerns in mind when suggesting a course of action; Communication is incredibly important to women clients since advisors need to communicate more often and in a language women understand; lastly, Education or women want to know more about financial matters, which helps them feel more empowered.

Getting along with female clients may also help financial advisors grow their businesses as New York Life Investments found that 55% of women will share their experiences with financial advisors among friends and family. Over a lifetime, women make 26 referrals to their financial advisor on average, compared to 11 by male clients. On the other hand, Tarsney warned that if they don’t like you, they will tell others.

Taking steps to better cater to the female clientele will become increasingly important in the years to come. Women now control 51% of global wealth, and the number is projected to grow to two-thirds of global wealth by 2030.

“This is a moment of opportunity, and a chance to go beyond knowing your female clients, to truly understanding them so that you can be more of a valued partner to them,” Tarsney said.

Tarsney also highlighted six key learnings or simple behaviors to ensure women investor retention and drive further acquisition, including rethinking roles, breaking unconscious exclusion, rescuing relationships, education as a passport, operating on her terms, and results with relationships.

When rethinking roles, financial advisors should consider the different key life stages of female clients like those who are suddenly single, are married breadwinners, are a married contributor to the household or a single breadwinner.

The second area of focus, breaking unconscious exclusion, demonstrates how small changes in behavior can make the entire investing experience more inclusive for women. For example, there are four key stages to conduct a great meeting, including the welcome, celebrate or review goals, reflect, and plan phases.

Rescuing Relationships will help you diagnose and improve the state of any relationship before it’s too late.

After building a relationship, one should shift to super-serving clients. One great way to do this is by offering education around the complexities of the financial space or using education as a passport.

To operate on her terms may mean small tweaks to how one operates, but may offer significant benefits to both a female client and a financial advisory business. For example, the right communication style is critical for operating on her terms. Additionally, how you manage your business is a crucial factor as roles and responsibilities continue to change in the household.

Lastly, providing results with relationships means a financial advisor should consider how to deliver and celebrate results with clients. While numbers may be helpful, they are probably not seeing those numbers in terms of an outcome but as a way to achieve their goals.

Financial advisors who are interested in learning more about enhancing client relations with female investors can watch the webcast here on demand.