Household financial decisions are being made increasingly by affluent women, creating opportunities for financial advisers, according to two industry surveys.
“We are in the midst of a significant shift in the wealth paradigm,” said Mindy Rosenthal, co-author of a study released by Wilmington (Del.) Trust Corp. and Campden Research, a division of Campden Media Inc.
“Women are stepping up to new levels of involvement in the management of their families' wealth, with 88% of those in the study playing a high to moderate role in the management of family assets,” said Ms. Rosenthal, who is managing director of New York-based Campden Media.
According to a survey recently released by Women & Co., a financial-resource program of New York-based
Citigroup Inc., 63% of women surveyed said they were responsible for making the majority of financial decisions in their household.
PRIMARY RESOURCE
Financial advisers were cited as the primary resource for information about finances and investing by women in the Citigroup survey, followed by their spouse or partner, and reading and research material.
“More women are including financial advisers as part of their financial support network,” said Linda Descano, president and chief operating officer of Women & Co., citing time concerns and the increasing complexity and unpredictability of investing.
“Affluent women want a customized approach,” she said. “Women at the same stage of life may have very different priorities and concerns.”
More than 1,000 women 40 to 70 were surveyed online by New York-based Synovate for Women & Co.'s study, “Women and Affluence 2008: A Generational Study.”
According to the Wilmington study, which was done in association with Relative Solutions LLC, a Cresskill, N.J.-based consulting firm, ultra-affluent women are looking for a holistic approach to wealth management, with an emphasis on establishing family governance structures and educating their children about wealth.
“[Women] want more engagement, more collaboration and have a broader view of what they want from their resources than their male counterparts,” the study concluded.
“They are looking for help in setting up processes and procedures to address wealth and philanthropy, and having a conversation about the responsibilities about wealth with their children,” Ms. Rosenthal said.
Advisers also need to understand that women define wealth differently than men, according to Cindy Conway, director of marketing for Wilmington Trust's Wealth Advisory Services.
“We found that men tend to define wealth in terms of status and power,” Ms. Conway said. “Women see wealth equaling personal productivity and as a means to independence and empowerment, not power.”
High-net-worth women want advisers who are focused on relationships instead of transactions, according to the Wilmington study. Forty women with a minimum net worth of $25 million were surveyed in phone interviews by Campden and Relative Solutions in January.
“Women are more relationship-oriented,” Ms. Rosenthal said. “They want to work with someone who understands their entire wealth objective.”
Susan Pratt Murphy, who works with wealthy women as managing director for Wilmington Trust's Wealth Advisory Services, agrees.
“The most effective way of working with high-net-worth women is to establish long-term relationships with them,” she said. “Trust and a thorough understanding of a client's situation are gained over time ... and cannot be passed from one relationship manager to another.”
PHILANTHROPY CLOUT
The decision-making influence of high-income women was underscored by a survey released last month by the Fidelity Charitable Gift Fund, a charitable-donor-advised-fund program established by Boston-based
Fidelity Investments.
Women with an annual income of at least $150,000 are the main drivers of philanthropy in their households, according to the online survey of 1,003 adults conducted for Fidelity in January and February by Chrysalis Research Inc. of Kirkland, Wash., and Research Data Technology of Woburn, Mass.
“The overarching theme is that women are more and more in the driver's seat of these decisions,” said Sarah Libbey, president of the fund.
E-mail Charles Paikert at [email protected].
