Recognize what makes female clients different

Women's financial concerns and goals vary widely, depending on factors such as age, professional standing and marital status

May 15, 2016 @ 12:01 am

By Liz Skinner

Lauren Faustini struggled for many years to find an adviser who was not solely focused on her money. Most of the advisers she worked with just made investment recommendations and barely knew her name. Now her adviser listens to what she needs, takes notes and helps with all her concerns, including finding her an elder attorney when her father-in-law's health was failing.

“Advisers should be more in touch with a woman's situation instead of just advising them on what to do with their money,” Ms. Faustini said.

It's time for advisers (and statisticians) to quit lumping all women together when it comes to their investing needs and what they ultimately expect from a financial adviser.

It's not as simple as the cliché headline trucked out for every female investor story: “What do women want?”

What one woman wants is often very different from another based on where they are in their lives.

For instance, a woman just starting out in her career and a wealthy widow have distinct money fears and goals, and often resemble their male counterparts in those same life stages more than they do each other.

“All women are different and have different circumstances,” said Stephanie Bowyer, an adviser with AEPG Wealth Strategies who is heading up AEPG Women, a new division aimed at helping women at various phases in their lives.  

InvestmentNews partnered with Kiplinger's magazine to survey female investors and discovered — based on slicing the data by age, wealth, income, work status and marriage status — how different these women can be. Appreciating the distinctions will help advisers win business and, more importantly, serve women more effectively.  

Standing alone

Women who are single and wealthy tend to be more willing to take on investment risk than the average female investor, according to the survey of about 750 women in January.

62%of female respondents do not use a financial adviserSource: InvestmentNews/Kiplinger's Financial Advice & Investing Survey

Almost half of single women with at least $1 million in investible assets rated their risk tolerance as “above average,” compared with about one-third of all women.

More of these women also feel “extremely knowledgeable” when it comes to their investing prowess.

However, learning even more about personal finance is one reason this group seeks out advisers.

“The biggest piece for me is education,” said Desiree Kinney, a recruiting director who is unmarried and lives in New York. “I have goals to build a foundation for a future family.”

She does her own investing research online, but she appreciates and usually attends the workshops and other information sessions that her advisory firm hosts.

Widows also are single, but they are often less confident about their financial ability than other single women and are more in need of the financial guidance an adviser can offer.

While only about a third of all women in the survey said their No. 1 goal is to live comfortable and predictable lifestyles, about half of widows picked that as the No. 1 goal, according to the InvestmentNews survey.

Window into widows

Widows — possibly because many lived during a generation when a wife may not have participated equally in managing the family finances — tend to feel more insecure about their investment acumen.

Only 43% of widows feel extremely knowledgeable when it comes to investments, compared with 53% of all women, the survey found.

Erika Lupo, a widow who has a 13-year-old son, said that before her husband died she didn't know anything about money.

She sought advisers who would appreciate that as a widow she would depend on them for quick responses to her questions and concerns.

“They need to understand my story so they can help me and guide me for the future,” Ms. Lupo said.

Debbie Taylor, founder of Taylor Financial Group, said advisers need to ask these often overwhelmed women who have lost a life-long partner about their concerns and goals. Like all clients, they'll open up more if they feel someone is genuinely interested in understanding them, she said.

“It's a confusing world and there are a lot of choices for these women to make, and they often don't have the experience to make these decisions,” Ms. Taylor said.

The top financial fear of most women, but particularly high for both groups who aren't married (single and wealthy, and widows), is running out of money during retirement.

Erika Lupo, left, a widow with a 13-year-old son, sought advisers who she could depend on for quick responses to her questions. Desiree Kinney, a single marketing director, cites the importance of financial education and attends workshops hosted by her advisory firm.

Age matters

While trust is important to everyone when choosing a financial adviser, it's especially imperative to older women, according to Nancy Ribeck, a recently retired photographer who is part of an investing group with other retired women.

“We are all nervous about giving our money over,” she said.

Evelyn Zohlen, an adviser and founder of Inspired Financial, said it is more difficult to get older women to understand the nitty-gritty of their finances.

“It's more of an uphill battle with older women to teach them about investing,” she said.  

Meanwhile, younger women find their social networks to be a great source of investing knowledge. Nearly three-quarters of those under 45 consider friends and family among the most important sources for investing knowledge, compared with about a third of those 45 and older.

Younger women also most fear “not having enough money to support my family,” while women who are 35 and older said running out of money during retirement scares them most.

Given these differences, advisers who bring up cash-flow management with younger women are likely to garner more interest than discussions of 401(k) or individual retirement programs.

Retirement is, however, a big focus for women who are the primary wage-earner, or so-called breadwinner, in their marriage.

Breadwinners

Wives earned more than their husbands in about 38% of marriages in the U.S. in 2009, according to the Bureau of Labor Statistics. And the U.S. Census Bureau found in 2011 that in 40% of households with children, the mother was the sole or primary provider.

54%of female respondents are the primary wage earners in their householdsSource: InvestmentNews/Kiplinger's Financial Advice & Investing Survey

Retirement income planning is the top service female breadwinners value from a financial adviser, the InvestmentNews survey found.

Additionally, female breadwinners are quite confident in their investing knowledge.

More than two-thirds believe they are “extremely knowledgeable” when it comes to investing, compared to about half of all women.  

Professional women are more likely to seek help from advisers. 

Erica Feyman Aisner, a partner at the law firm of DelBello Donnellan Weingarten Wise & Wiederkehr, has used the same advisory firm for 15 years. She appreciates that her advisers take a holistic approach and that they began working with her when she had only a small amount of money.

“It's not just financial advice we are getting on our investments, but how to stay financially healthy overall,” she said.

Women executives

About 44% of women in management, executive or ownership positions currently work with an adviser, compared with 39% of women as a whole, the survey found.

Advisers interested in attracting this group should make sure their websites are in tip-top shape. More than half said information on an adviser's website was a top draw when they were seeking an adviser.

Single and wealthy women, while also checking out an adviser's website, chose almost as often “attending a seminar hosted by a financial adviser” as a helpful gauge.

Attending an event at a specific time isn't always realistic for women in high professional positions, who tend to be time-starved. Although these women can be referral sources.

About half of women in these leadership roles said they were likely to refer their family or friends to their adviser, according to the InvestmentNews survey.

Ms. Aisner agrees. “I always recommend my advisers because they've done a great job for us,” she said.

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