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Learning how to instill confidence in clients

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Women are less likely to take action until they feel nearly 100% confident.

According to the Merrill Lynch Women & Financial Wellness report released earlier this year, the No. 1 financial regret that women have is not investing more of their money.

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A lack of investment knowledge and lack of confidence were reported as the primary barriers. The key word here is confidence. Women are less likely to take action until they feel nearly 100% confident.

So, what can we as advisers do to help instill confidence in our female clients? The answer is quite simple: Invite them to the table.

Ask them what is important to them in their financial lives.

Continually align the conversation with their goals and objectives.

Even though there are more and more advisers having these real conversations, there is still an army of advisers holding “old school” meetings. Meetings where the adviser proves expertise through the use of industry jargon with little regard for who is sitting across the table.

In this instance, if the adviser can check all the boxes for discussing ratios, derivatives, yields and liquidity (as the client’s eyes slowly glaze over), the adviser wins!

Lack of relevance

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The husband may walk away thinking he is brilliant, but the wife has silently sworn off investing or even being part of the conversation because it is confusing and most of all not relevant to their situation.

If this has happened, we need to invite the wife back to the table and ask her what is important to her? What does she care most about? What is she most concerned about?

We need to change the conversation to learn her perspective on the family’s finances. Where does her comfort start? Where does it end? And why?

The more we can learn from our female clients and the more we tie investments back to them as individuals and as families the more confidence we help to instill.

This is so crucially important for women because 80% to 90% of women will be solely responsible for running their own finances at some point in their life due to divorce or widowhood, according to the National Center for Women and Retirement Research.

The sooner we can bring clarity to investing and help women engage in their own financial lives, the better prepared they will be when a crisis arrives.

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The irony is that even though women have less confidence around investing, when they get it, they are often better investors than men. Women set goals, they stick to a plan and they don’t tinker.

That in itself is the foundational recipe for success and is often intuitive for women. So, my advice for anyone feeling intimidated by the conversation is to say: “Stop. Please explain how that fits into our goals and our plan.”

Linking investments back to the plan establishes purpose and relevance. This all leads to confidence, which at the end of the day should be both ours and the client’s primary measure for success.

Kathryn Brown is founder and principal of Morton Brown Family Wealth.

Our final Women Adviser Summit of 2019 will be held in New York City. Register now.