Attracting female clients, employees: It's not all about gender, so don't forget about chemistry

InvestmentNews panel digs into ways the advisory business can break its 'old, male and pale' image

Apr 23, 2014 @ 12:22 pm

By Carl O'Donnell

The demographics of the financial advisory business have historically been summed up in three words: “old, male, pale.”

This won't be the case for much longer. About half of advisers under 40 are women, and females are poised to control $20 trillion in personal assets by 2020. To help advisers keep up, InvestmentNews hosted a webcast Tuesday focused on attracting and retaining female clients and advisers.

Moderated by InvestmentNews' contributing editor Mary Beth Franklin, the panel featured Kathleen Burns Kingsbury, a wealth psychology expert and founder of KBK Wealth Connection, Mindy Diamond, president and CEO of Diamond Consultants, and Frank T. Patzke, president of Guidant Wealth Advisors.

(Don't miss: Women aren't getting equal shake from the advice industry: CFP Board)

The most important thing for advisers to understand is that you don't need to be a woman to attract female clients, Ms. Kingsbury said. Only about a quarter of women have a definite preference for an adviser of the same gender.

Advisers also need to understand how to strike the right balance between developing an awareness of women's unique needs and avoiding stereotypes. While there are certainly ways that the life experience of women in general may differ from that of men, the most important information about a client will always come from learning about the person's individual needs, Ms. Kingsbury said.

“Good chemistry trumps gender any day,” she said.

Mr. Patzke shared several ways that male advisers can create that chemistry. For example, he was able to achieve a client base that is more than half female in part by specializing in helping widows. His mother was widowed at an early age and that unique life experience helped him connect with female clients.

(More: The wealth management industry at a turning point)

He also suggested pairing multiple advisers — preferably male and female — with clients during meetings, especially when working with couples. That allows clients to gravitate toward whoever they connect with most. There's no reason to assume that the female client will click with the female adviser, but the option is at least available.

The panel also discussed recent data produced by the Certified Financial Planner Board of Standards Inc. that found that female advisers have made up just 20% of the industry for about a decade. Ms. Diamond suggested that advisory firms can do more to attract female employees. One important move is to make clear that advising is a helping profession. Mathematical skills and product knowledge certainly help, but nothing replaces the human touch.

She also suggested that advisers assert that the business doesn't have to be commission-only, with other ways that employees can be compensated. There are also alternative career paths, like beginning as an analyst, that allow an employee to get her feet wet without immediately gambling on her ability to attract assets under management.

These steps are important for drawing in women, who often are more risk averse, Ms. Diamond said. Regardless of advisory firms' approach, however, the long-term prospects for women joining the industry are bright.

“As the financial literacy of the country improves, we will see more men and women join the industry, which will make everyone better off,” Ms. Franklin said.

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