Growing an investment portfolio won’t give a woman the assurance she wants. Laying out a plan for how she’ll reach her financial objectives and protect her assets will – and that’s right in an advisor’s wheelhouse.alvarez/iStockPhoto / Getty Images
Although women control a greater proportion of total wealth than they ever have, anecdotal and statistical evidence suggests that financial advisors still aren’t giving women investors the attention they deserve. Yet, if advisors continue down this path, they do so at their peril – especially as women can be great allies in helping advisors grow their business.
A recent anecdote about a group of private bankers, who were summoned to attend a training session on how women view money and finances, shows how much work remains on this front. A few months earlier, one of these male bankers had met with a couple looking to bring over $12-million in assets to that bank. The meeting was an unmitigated disaster. Unbeknownst to the private banker, the majority of the assets belonged to the wife. She was the household’s financial decision-maker – not her husband.
Yet, the private banker refused to acknowledge the wife’s presence during that meeting, keeping his eyes and pitch solely on the husband. He even went so far as to cut her off when she tried interjecting. Justifiably, she was so irked that she walked out of the meeting – but not before stating that she’d make sure no one she knew would do business with him or that bank ever again. She didn’t stop there. She called the head of private banking, which triggered a series of internal meetings and, soon thereafter, the aforementioned training session.
What’s most unfortunate is that the entire incident could have been avoided with some proactive bias training and focus on customer segmentation and experience. The bank not only lost custody of $12-million in assets but potentially hundreds of millions of more dollars through referrals.
This story and the ensuing fallout aren’t at all surprising. It’s one of at least 50 accounts I’ve heard from women over the years who have faced similar experiences of feeling alienated, dismissed and duped by male advisors. A Boston Consulting Group study shows that 73 per cent of women are dissatisfied with the financial services industry, while a recent Bank of Montreal survey found that 87 per cent of women looking for an advisor say they couldn’t find one with whom they could connect. That’s no coincidence.
Too many advisors are making preconceived and incorrect assumptions about women’s interests in their own financial welfare and grossly underestimating the value of female clients’ business. That’s because female clients are three times more likely than men to refer their friends and family members to their advisors.
Saijal Patel, founder and CEO of Saij Elle.Mark ONeill/Courtesy of manufacturer
I often host women to speak about financial topics. Every time I do this, I’m asked if I can refer a “good advisor who I trust,” or there is an exchange of referrals between the women who attend. It comes down to this: Women trust advisors whom their fellow female friends trust.
The financial advisory business depends a lot on word of mouth. It’s smart business to align with women who are naturally more inclined to speak about great experiences and be huge brand ambassadors.
Furthermore, while most men tend to compartmentalize money and put a greater emphasis on investing, most women take a holistic view of their money. Therefore, a comprehensive financial plan, which more and more advisors are providing these days, is completely in line with how women think.
Women need and want help in evaluating their full financial needs – from tax planning, estate planning and assessing their insurance needs, in addition to investing. Growing an investment portfolio won’t give a woman the assurance she wants. Laying out a plan for how she’ll reach her financial objectives and protect her assets will – and that’s right in an advisor’s wheelhouse.
Lastly, if there’s one thing I’ve learned in speaking with thousands of women each year about money, it’s that perfectionism is the top reason stopping women from taking control of their finances. They feel they don’t know enough to prevent them from making a costly mistake or they mistrust the sources available to them.
Engaging with a knowledgeable human expert is what they want – not just to provide advice, but to educate and empower them on key basics and to assure them they’re on the right track. Women are aware of the challenges they face in reaching financial security in light of the wage gap and their longer life spans. They have a greater vested interest in building a long-term relationship with their advisors.
Canadian women control $2.2-trillion of financial assets according to a study Canadian Imperial Bank of Commerce published last year – and that figure is set to almost double in the next eight years thanks to the rise in labour income and the huge wealth transfer that’s currently underway. The financial services sector can no longer afford to see women as an afterthought.
And while advisors have the most to gain, they first need to see women for who they are: ready to engage, build wealth the right way and be their best allies.
Saijal Patel is founder and chief executive officer of Saij Elle, a financial consultancy and education platform that aims to help women create financial independence and security, financial services institutions serve the needs of female investors better and companies build effective financial wellness programs for their employees.