When it comes to wealth and who controls it, several demographic trends point directly to women. In the U.S., women continue to outlive men, on average, according to the Centers for Disease Control and Prevention. While the gender pay gap persists, Pew Research data shows that in some cities, young women outearn their male counterparts. Women also represent a larger share of college students and graduate at higher rates than men, according to the American Institute for Boys and Men. Women are also poised to inherit trillions of dollars during the Great Wealth Transfer.
Women are increasingly earning, inheriting and controlling wealth. This shift is reshaping the competitive landscape for financial advice. Advisors who are not effectively connecting with women are leaving both opportunity and assets on the table – not only for today, but for years to come.
Are advisors doing enough to connect with these increasingly influential decision-makers? Some are. Others are not sure. Depending on your current service model, the following can serve as either a self-assessment or a guide to building stronger relationships with women.
Anchor With Both Partners
When working with couples, do not focus primarily on one partner at the expense of the other. Having experienced this first-hand, I can tell you it’s a relationship destroyer. Whether entering the room for a meeting or beginning a new client relationship, advisors must acknowledge and engage both partners equally, build meaningful relationships with each person and continue to nurture those relationships over time. Make sure all voices in the room are heard, from objectives to objections and from opinions to perspectives.
Do Not Be Transactional
Returns matter, but only as long as they help clients achieve what matters most to them. Focusing solely on investments rather than ambitions diminishes the important role advisors play in their clients’ financial lives. When conversations revolve exclusively around performance, the bigger picture can get lost.
Avoid The Stereotypes
One of the most common – and potentially costly – misconceptions advisors have about women clients is that they are inherently more risk-adverse than men. In my experience, that assumption often misses the mark.
Speaking from personal experience, I am comfortable considering investments that may carry higher levels of risk. If I have the information and understand the risks, rewards and trade-offs involved, I can get onboard with opportunities that may be outside the traditional comfort zone.
Do not mistake a desire for information and understanding for a lack of willingness to take risks.
The lesson for advisors is simple: Do not mistake a desire for information and understanding for a lack of willingness to take risks. Many women are not looking to avoid risk altogether. They want to make informed decisions and understand how an investment aligns with their goals.
Creating an informed investor is one of the smartest things an advisor can do. The more people understand their options and the rationale behind a recommendation, the more confident they can be in their decisions.
Partner With A Firm That Supports Your Efforts
Technology, community and intentionality are a powerful combination for advisors seeking to better serve women. Creating an environment that encourages networking, the sharing of best practices and open conversations about challenges and opportunities can have meaningful impact.
Our firm’s Community of Women is a forum where advisors connect, collaborate and learn from one another. By sharing experiences, best practices and unique perspectives, members strengthen their businesses, enhance the client experience and support one another’s professional growth.
At Cambridge, women are represented throughout our leadership team, beginning with our CEO, Amy Webber. We are intentional about cultivating women leaders because we believe firms benefit when different perspectives are represented around the table. As more women control wealth and take primary responsibility for financial decisions, firms that fail to engage them risk seeing those assets walk out the door.
Don’t Wait And Don’t Limit Your Outreach
Following a life event, death, divorce or another significant transition, advisors who have not nurtured relationships with all involved parties often struggle to retain assets. This should come as no surprise. Advisors who did not put in the work up front are more likely to see assets leave when the relationship changes.
And this extends beyond women. It includes the next generation as well. Today, 73% of wealth is held by households with individuals over the age of 55, according to the Federal Reserve, but the median age of the population is approximately 39 years, according to the Census Bureau. Over the coming decades, a tremendous amount of wealth will change hands.
Whether those assets ultimately pass to a partner or children, advisors need to have relationships with those individuals long before a transition occurs. The firms that will be more successful are the ones that engage families across generations rather than waiting until a wealth transfer is already underway.
Women are not a niche market. They represent one of the most significant opportunities in the future of wealth management.
Women are not a niche market. They represent one of the most significant opportunities in the future of wealth management. As more wealth changes hands and more women take the lead in financial decision-making, advisors who adapt their approach today will be better positioned to serve the next generation of clients, retain assets across generations and growth their businesses for years to come.
Tammy Robbins is Executive Vice President and Chief Business Development Officer at Cambridge Investment Research.
