What women clients want

Sigmund Freud and the financial advice business have something in common: Neither can seem to figure out what women want.

As our Jeff Benjamin recently reported, the wealth management industry left $14 billion of potential revenue on the table last year by failing to tailor its products and services to women clients.

The authors of the study that pointed out this glaring failure, consulting firm Simon-Kutcher & Partners, said that the advice business doesn’t understand women’s “differentiated needs” and falls back on gender stereotypes about women being less equipped to handle finances, not being confident about making investment decisions, or lacking financial acumen.

For the women advisers and others in the advice business who are featured in this week’s special issue, the industry’s shortcomings vis-à-vis women — as investors, advisers and financial leaders — are hardly news. They have battled and overcome stereotypes and overt, subtle and genteel discrimination throughout their careers. And they probably would corroborate the report’s findings, which discuss how men and women investors differ in their approaches to investing.

TACTICAL APPROACH

Male investors tend to take a tactical or even game-like approach to investing, the report said. They often think in terms of scorecards and performance, so being motivated to act by talk of “hot” sectors and quarterly rankings, for instance, is usually appealing and effective. Since so many of today’s veteran advisers, mostly male, started their careers as stockbrokers, and since wirehouses and other large firms have traditional brokerage in their corporate DNA, it’s no wonder that a transactional, male-friendly orientation is so much a part of today’s advice business.

Women, on the other hand, tend to be less interested in the activity of investing and more interested in the ends for which the investing is being done. Education for children and grandchildren, a comfortable retirement and leaving a nest egg are more the things that women clients have in mind when they invest, rather than seeking the top ETF.

Toward that end, the study found that when women seek financial advice, they want education, training and tools that help them with long-term planning. They place a higher value than men on attentive service, personal relationships and access to a trusted financial adviser, preferring in-person attention and willing to pay a premium for it. What’s more, their wealth grew at a rate almost twice as fast as men’s between 2016 and 2021.

As a market niche, women seem to have it all — money, numbers (after all, they are the majority) and an interest in being served. Even better, what they are looking for is neither a secret nor all that complicated. Perhaps the answer to the question about what women want is simply another question: Why won’t the industry just listen?