It only takes a cursory glance at the phenomenon surrounding women and their wealth to realize that the landscape is shifting, irreversibly, in a direction that will have a significant impact on financial advisers.
Research and statistics highlight the importance of managing women's wealth: women live longer; women are responsible for more household financial decisions; more women are in the workplace generating personal income and retirement assets; and women stand to inherit from both their families and their spouses.
What's most encouraging about the female market segment is its already widespread use of advisers. Broadly speaking, everyone with more than $1 million in assets has engaged an adviser at some point to help navigate their financial affairs. Women are more likely to seek and hire advisers because they see them as experts with special skills — not unlike an attorney, contractor, physician or mechanic — who can help them respond to a specific situation.
For many women, the subjects of money, investing, finances and the markets are secondary to family, health, community and personal passions.
I recently co-presented with Deena Katz, a founding partner of the $2 billion planning firm Evensky & Katz Wealth Management and an associate professor at Texas Tech University, on this topic. She clarified the point by saying most women think about money as “a vehicle to accomplish other things in life and not the be all and end all.”
Ms. Katz went on to share a story about a client who was using her wealth to fund mobile book units for areas of the U.S. without local libraries. As a result, the conversations during their meetings are less focused on stock selection, returns and benchmarks and instead focus on things like “how many trucks the project will need and how many books will be on those trucks.”
Her story does an excellent job of illustrating the issue that confounds so many advisers when they work with women: chemistry and interpersonal skills matter more than technical expertise.
Over the past 15 years I've conducted a significant amount of research with wealthy women about their views toward financial services, advisers and money. Developing a successful working relationship with female clients may require you to recalibrate the way you engage and to incorporate the approaches they favor and the issues they care most about. For instance:
• Listening and problem solving are the top skills that wealthy women look for in advisers, so your interactions should emphasize your ability to do both of those things.
• When women fire their advisers, it's rarely for underperformance or the inability to source a specific kind of product or investment, and most frequently due to a shortage of attention and an overarching sense that the professional did not understand them or their objectives.
• Tax mitigation and asset protection are chief priorities among the financial interests of wealthy women, but they don't necessarily want to worry about the technical aspects of planning, like insurance policies and
estate planning activities, that help them accomplish those goals.
If your client is creating a will, building an addition, having her vision corrected or her transmission repaired, it's unlikely that she wants extensive details on the techniques and tools that will be used, only that an expert is on the job and working toward the outcome she wants. The same is true for finances. Reassure her that you've heard, understand and share her priorities and are taking the appropriate steps to get the job done.
Hannah Shaw Grove is principal of HSGrove LLC, a boutique consultancy to help advisory professionals with marketing, client engagement and business expansion in the high-net-worth-markets and family offices.
