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Successful marketing requires an understanding of your target market. Too often, however, advisors are misled by outdated industry ideas and strategies that have shifted over time. Advisors who target women investors should avoid myth-based errors that others have made.
My friend, whom I’ll call Lauren (she requested I use a pseudonym), is a successful consultant with a good reputation and an international resume. She enjoys her considerable disposable income, her spacious Chicago condo, and weekends at her vacation home in Wisconsin.
But she doesn’t especially like her financial advisor.
“I need to be more proactive about investing and money in general, but I don’t have the extra time to focus on it,” she told me recently over drinks on her poolside terrace. ”My current advisor is okay, but he doesn’t really feel right to me.”
Why not? What does an advisor have to do to “feel right” to her? What’s Lauren looking for and, in general when it comes to financial advisors, what do women really want?
My firm, Invesco, set out to answer those questions with a series of qualitative focus groups in the US and Canada. Women participating in the groups already worked with financial advisors and had at least $100,000 of investable assets; many of them had much more. What we heard surprised us – and what was even more interesting was what we didn’t hear.
This research debunked three myths about women investors in particular: (1) That advisors who promote themselves as “focusing on women clients” will be more likely to attract them; (2) that it’s important to focus on the unique challenges women face, and (3) that, because women are more relationship-oriented, they may not be as concerned about taking action and aiming for results.
Myth No. 1: Seminars, networking events and other marketing initiatives designated as being “women- focused” will convey that you’re serious about cultivating a female clientele.
You want to build a female clientele, so you say that you do. You offer a “Women and Investing Seminar.” Maybe you invite your best female clients to a “Women’s Spa Outing” or similar event. You state on your web site and in your marketing materials that the “unique needs of women” are a focus of yours. What could be easier? Marketing 101, right?
Wrong.
Women prefer that their advisors focus primarily on them as individuals, not on women in general. We tested statements such as “…it’s not about understanding the different ways men and women view and relate to money; it’s about understanding the way YOU view and relate to money. It’s about understanding your goals, your plans for the future…” and we got highly positive reactions. Women want their individuality, not their gender, to be the focus.
We found another clear example of this as we tested workshop titles intended for women. We found that titles that included the word “women” tested poorly. “Investing for Women?” No. “What Women Know About Money?” Didn’t work either. How about “The Female Financial Advantage?” Not even close. Gender-neutral titles were much more favorably received.
We’re not saying that the industry in general or you as an advisor shouldn’t intentionally target women as clients. Women, after all, control 80% of consumer purchasing decisions in the country!1 It just means making gender part of your headline won’t help in your marketing.
Myth No. 2: Point out the special financial challenges that women face and then demonstrate how you can help remedy them.
This, too, might seem like common sense. Most financial advisors are well aware that US women earn 23% less than men on average,2 have less saved than men for retirement and will live longer than men –thereby having to fund longer retirements with less money.3 It’s logical that we might point out those challenges to female clients and then demonstrate how we might help fix them, isn’t it?
But we have heard these facts before, as have our clients. At this point, they’re tired of hearing them again and again.
When we tested messaging like “women have held lower-paying or part-time jobs that don’t offer retirement plans, they earn less than men on average, and they work fewer years because they leave the workforce to care for children,” responses ranged from neutral to slightly negative. Not surprisingly, feedback included “that’s very negative” and “it sounds condescending.”
But, one might argue, these facts are true, aren’t they? Don’t we need to face the facts?
Yes, of course we do, but that doesn’t mean we should lead with negative messaging. In fact, we can accomplish a lot – raise women’s awareness of how much they’re earning and saving toward retirement, help them structure financial plans, assist them in finding the motivation to make those plans a reality – without reciting those statistics.
Case in point: In our research, when we encouraged women to “create a financial vision,” “take the time to review their current profile,” or “design a plan for themselves, and then make it happen,” the positive response nearly doubled! With not a single mention of how they weren’t saving enough for retirement or how they didn’t earn that much money!
Consider an analogy. A tennis coach is working with a group of players known to have some limitations. Does the coach start off by announcing, “Some of you may know that, on average, you have 23% less tennis skills than other players. You didn’t practice enough when you were younger because you took extra time off to take care of your family. And now you’re going to have to play tennis more competitively than ever before, with less skill! Now go get ’em!” How’s that for motivation? Of course, a good coach wouldn’t do that – a good coach would help the players create a training program targeted to each player’s specific needs and motivate each of them to find and focus on his or her strengths. We as financial advisors can do the same thing.
1. Bridget Brennan, Why She Buys, Crown Publishing Group, 2009
2. DeNavas-Walt, Carmen, Bernadette D. Proctor, and Jessica C. Smith. Income, Poverty, and Health Insurance Coverage in the United States: 2009. U.S. Census Bureau, Current Population Reports, October 2010
3. Reshma Kapadia. The Forgotten Majority, Smart Money Magazine, October 2010
Myth No. 3: Since women tend to be collaborators, their relationship with their financial advisor is the priority – taking action isn’t as important.
This myth is a false dichotomy. Women tend to be collaborators. Their relationship with their advisor is the priority. All true.
But taking action is important.
Women want to get things done. Media coverage of female investors often emphasizes the personal attention, careful listening and sense of connection that women seek from their advisors. To be sure, those things are all very important. But the danger is that these facts may lead us to believe that if these relationship-oriented bases are covered, perhaps it’s not as important to set ambitious goals and work with female clients to make things happen for them. That belief is a trap – women want to make things happen.
The women in our study were not passive. Action plans based on “building a financial plan designed to maximize growth and improve financial outcomes” and “taking advantage of new and innovative financial tools” tested well with our focus groups.
Women were looking to collaborate, but that meant they wanted an active role for both their advisors and themselves. Women in our study also reacted positively to co-creating their financial plans along with their advisors, defying the stereotype that female investors may be more likely to hand carte blanche control of their finances over to their advisors. The idea of working along with their advisor to “set personal goals, shape their financial plan, and build a strategy” elicited very strong results. Conversely, the more passive approach of an advisor “making most of the investment decisions, building portfolios for the client, and checking in several times a year to let them know where they’re at” really tanked, eliciting some of the lowest scoring reactions of the project.
Women want solid relationships with advisors who understand their needs. But don’t let that lead you to think that they don’t want solid results as well.
As you continue to build your practice, and as more female investors become a part of it, our research has some important lessons to keep in mind:
- Even when you intentionally target women clients, focus your messaging on them as people, not as women.
- Instead of showcasing the challenges that women as a group face, showcase how you can help each individual with a proactive plan that’s right for them.
- Highlight the financial actions that you’ll take, the results that you’re aiming for, and the collaborative role that your female clients will play in the process.
If you take this approach, you will “feel right” to many female investors – including to my friend Lauren, who might be in the market soon!
Lisa Kueng is an Executive Director and national speaker for Invesco Van Kampen Consulting. She was a featured presenter at Working Woman Magazine’s “Marketing Financial Services to Women” Conference, “The Possible Woman Conference” with Ann Richards, and at a Pennsylvania Treasury Department statewide tour.
Read more articles by Lisa Kueng
