Note to self: Don't ignore clients' wives

Women control increasing amount of wealth — and are likely to dump an adviser after the death of a spouse

Nov 14, 2012 @ 4:35 pm

By Caitlin Mollison

Sobering data about women and their relationships with their financial advisers set the stage today for a panel discussion on winning and retaining female clients.

Advisers who focus on their male clients while ignoring those clients' wives risk losing business, according to Suzanne Siracuse, publisher of InvestmentNews.

She moderated the panel discussion "Engaging, Serving and Retaining Female Clients: Strategies for Building a Successful Practice" at the Schwab IMPACT conference in Chicago.

Ms. Siracuse cited data showing that 80% of women die single, and women outlive their spouses by an average of 14 years. Meanwhile, women control $14 trillion in wealth today and are expected to control $22 trillion by 2020.

Ms. Siracuse also noted that studies show that 70% of widowed women change advisers within one year of the husband's death.

Against that backdrop, she and two experts on working with women discussed five different segments of the female market and how advisers should approach each one. The segments are widows, executives, members of the so-called sandwich generation, divorcees and retirees.

When working with widows, sensitivity and listening skills are key, said Heather R. Ettinger, managing partner of Fairport Asset Management LLC. "Something that is very important to women is not to be lectured to," she said. "You have to talk about how the experiences are different for widows than other clients."

Ms. Ettinger suggests that advisers who work with widows set up an advisory council of such clients that meets several times a year. She also mentioned that grief counselors can be a great source of referrals.

Coming up with time-saving strategies is imperative when working with executive clients, Ms. Ettinger said.

These busy women may also expect additional services such as executive coaching and help with career development, she said.

"Is there a role that you can play in matchmaking that way" in terms of advancing these women's careers by making introductions, Ms. Ettinger asked.

She also advised that advisers who work with female executives get involved with community organizations to "make sure you're visible."

Panelist Marie Dzanis, senior vice president and head of sales and servicing at FlexShares Exchange Traded Funds, cautioned that advisers should have a tailored approach to working with up-and-coming female executives, particularly those under 30.

This group tends to be more technology-savvy, so it is critical to establish credibility with them on their terms by using social media, she said.

Ms. Dzanis also suggested that advisers prospect for such women through university clubs and companies that have leadership training programs for women.

She recommends sometimes starting off with such clients using a flat fee and then changing to a fee-based arrangement later on.

Women who are sandwiched between their responsibilities caring for their aging parents and their children can be a "highly emotionally charged" group to work with, Ms. Dzanis said.

Advisers who deal with women in these circumstances have to find a way to help these clients make "life easier and deal with the expectations of what's to come," she said.

Working with such clients may require that advisers become well-versed in dealing with the Veterans Administration, local hospitals and the states, Ms. Dzanis said.

Meanwhile, when working with divorced women, it is important to keep in mind that "for women who haven't controlled the finances, there is a lot of sensitivity on fees," Ms. Ettinger said.

Advisers need to come up with a way to educate such clients on how fees work and perhaps provide comparisons with the fees charged by mutual funds and other investment products, she said.

Ms. Ettinger also mentioned that acquiring the certified divorce financial analyst designation can be helpful, as can becoming an expert witness on valuation issues that put advisers in front of divorce attorneys, potentially garnering referrals down the road.

Finally, working with retirees can depend on whether they have a spouse who is living, Ms. Dzanis said. Those who retire with their husbands may find that there are a lot of emotional issues around dealing with the new division of labor and adjusting to a different income level.

Ms. Dzanis noted that retirees tend to be a less tech-savvy group who appreciate interpersonal exchanges such as handwritten notes.

Ultimately, the panel concluded, working effectively with women can result in a big payoff.

"The exponential growth is huge," Ms. Ettinger said. "If your value proposition resonates with women, they'll refer you all over the place."


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