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A recent study by Fidelity Investments found that 70% of widows fire their financial advisor within one year of their spouse’s death!1 Why would so many women dismiss the advisor who worked so diligently for their family, in many cases, for years? The answer is enlightening: The women viewed their advisor as condescending toward them, often meeting only with their spouse. Even in joint meetings, they believed the advisor made eye contact and communicated primarily with their husband, as if they had no say or interest in the financial security of their family.
In short, the women felt overlooked and undervalued, leading to a lack of trust in the advisor.
Why should you care about female clients? Besides the ethical reason to avoid gender bias, there are some very important statistics (cited and referenced by Holly Buchanan in her book, Selling Financial Services to Women and by Kathleen Burns Kingsbury in her book, How to Give Financial Advice to Women):
Over the next few decades, it’s predicted that women will inherit close to $30 trillion in intergenerational wealth transfers. Because women are likely to outlive their husbands, women will control most of this wealth. They will also inherit their parents’ wealth.
57% of college graduates are women. Female college graduates control more than 60% of the personal wealth in the U.S.
22% of women earn more money than their spouses.
Women make approximately 80% of their family’s buying decisions.
89% of bank accounts are controlled by women.
28% of homeowners are single women.
45% of the millionaires in the U.S. are women.
In 2009, 40% of private companies were at least 50% owned by women, compared with only 26% of companies in 1997 in that category; 20% of firms with revenue of at least $1 million were owned by women.
In short, women are earning more, inheriting more and controlling more wealth than ever before. This is a huge, untapped demographic cohort awaiting every financial advisor who understands some key points about women’s needs and desires.
A digression
When I was a psychologist in the U.S. Air Force during the Vietnam War, one of my duties was helping the wives and families of servicemen killed, captured or missing in the war. I was shocked that many women had absolutely no idea what financial plans or arrangements their spouses had prepared before departing overseas. Most women didn’t even know where to find the paperwork or the names of insurance companies or brokerage firms that their spouses had used.
A few years ago, I coached a very successful female financial advisor, who now enjoys a very successful career. She runs a firm with several other advisors, all of whom are females. This is not a coincidence; it is by design. She only hires females, primarily because she works exclusively with female clients! Aware of the statistics about women and their wealth, she decided many years ago that focusing on female clients would be a smart way to build her career.
And boy, was she right!
As a teen, this advisor observed that her mother made virtually none of the financial decisions and her father rarely shared information about investments, insurance plans or any form of estate planning with her. Consequently, when her father died, her mother was frozen with feelings of helplessness. She did not understand the details or nuances of her financial situation and felt depressed and anxious as a result.
This advisor decided early on that she would find a career to help women, so that her clients would never find themselves in this paralyzing position.
Why women become disenchanted with their advisors
Returning to that dramatic statistic, it’s important to understand why 70% of widows dismiss their family’s advisor within a year of their spouse’s death. When asked by their new advisors why they left their old one, women commonly answer that:
“He didn’t listen to me.”
“He was condescending toward me.”
“He hardly looked at me or asked my opinion.”
“I couldn’t trust him to consider my needs”
“I felt overlooked and undervalued.”
“I didn’t believe he really understood my fears and goals.”
For some male advisors, the problem with dealing appropriately with female clients is part of a larger problem they have dealing with women. Sometimes men have stereotypical views of women and finances, including the following misconceptions:
Women prefer to leave financial decisions to men.
Women are overly emotional and base financial decisions on their emotions at the time.
Women are impulsive and make financial decisions that they later regret.
These are stereotypical myths. If you embrace them, eliminate them from your thinking.
Dr. Jack Singer is a professional sport psychologist and a professional speaker/coach, primarily for financial professionals. His most popular keynote is entitled: “Developing & Maintaining the Mindset of a Champion Financial Professional.” Jack is the author of “The Financial Advisor’s Ultimate Stress Mastery Guide.”
Read more articles by Jack Singer, Ph.D.
