Financial advisory firms that don't specifically target female clients are potentially missing out on 48% of the nation's millionaires, a third of household high-earners and and half of the country's total wealth.
The good news is, you don't need to be a female financial adviser to work with and build deeper relationships with female clients. But it helps.
"Is serving women different? The answer is obviously yes," said Iwona Cholewa, regional director at Dimensional Fund Advisors.
Speaking Friday morning in San Diego at the TD Ameritrade annual LINC conference, Ms. Cholewa and Kahne Krause, head of adviser communities at
DFA, stressed that it is a mistake to think of women as a niche market.
"A niche is a small piece of something or a segment," Ms. Cholewa said. "We are half of the population and control half of the wealth. That's hardly a niche."
But even if female clients aren't to be viewed as a niche, it behooves advisers to understand the specific needs of women when it comes to financial services.
If advisers need any motivation to pay more attention to female clients, consider that 95% of women will be responsible for their family's financial decision-making at some point in their lives, according to DFA's research.
The research also found that female clients seek financial advice more than men, that they are less influenced by media in their financial decisions than are men, and that they do more research on financial matters than men.
As Ms. Kruse pointed out, those characteristics describe an ideal
financial planning client.
One of the biggest breakdowns when it comes to working with women begins with the so-called disengaged spouse, usually the wife, who is often unintentionally ignored by advisers who tend to work more closely with husbands.
"We know that 70% of widows leave their financial adviser within a year of their husband's death," said Ms. Cholewa.
DFA research also shows that 67% of women feel misunderstood by their adviser and just 33% of women says they
trust financial service professionals.
"Advisers should be thinking about the disengaged spouses," Ms. Cholewa said. "Women outlive men by five years, and wives outlive their husbands by 14 years, on average. That's a really long time to plan to live alone."
(More: Female clients have gone from niche to the new normal)
After laying the foundation for why female clients represent a tremendous opportunity, Ms. Cholewa and Ms. Kruse highlighted a few ways in which advisers can adapt their financial services to be more inviting to women.
In terms of bringing wives into the conversation, they recommend employing "fire drill" scenarios, where the adviser will meet separately with the wife to discuss strategies to manage the sudden or untimely passing of their husband.
"It's a good way to engage somebody who is not engaged," said Ms. Kruse.
Another strategy is hosting women-only events, which could range from cooking classes to something specifically related to financial planning.
"We've found that women-only events work, but that men-only events don't work very well," said Ms. Cholewa.
One benefit of the women-only events, she explained, is that women tend to feel less inhibited about speaking up and asking questions when their husbands are not around.
This relates to the "confidence gap," she said, which is less about how much women know than it is about how they sometimes feel intimidated in mixed company.
"We don't feel free to ask what we feel are dumb questions when our husbands are in the room," Ms. Cholewa said.
Along with becoming more empathetic to issues that are specific to women, such as the gender-pay gap, and taking time off work for family commitments, they also suggested that advisers make some changes to the way they set up and furnish their advisory office.
There can be an intimidation factor associated with a "mahogany desk and sterile conference rooms," Ms. Cholewa said. Some advisers, she said, have created more welcoming "conversation rooms" for meeting with female clients.
(More: 5 things female breadwinners need from their financial adviser)
