The good news is that women
trust financial advisers more than automobile mechanics. The bad news is that they
trust advisers less than insurance agents.
On a scale of one to five, with a five representing the highest level of
trust, women gave advisers a 3.2, putting them just ahead of the 3.1 rating given to mechanics and just behind the 3.3 rating given to insurance agents, according to a newly released survey of 1,500 American women by State Farm Life Insurance Co. of Bloomington, Ill.
At 4.1, doctors were rated the most trustworthy, followed by bankers at 3.6 and accountants at 3.5. Automobile salespersons were rated the least trustworthy at 2.3, according to the survey, which was released Aug. 21.
The survey also found that only 12% of women characterized their relationship with their adviser as "strong." By comparison, 56%, 18%, 17% and 16% of respondents used the same characterization to describe their relationship with their doctor, mechanic, banker and insurance agent, respectively.
"I think there's a disconnect," said Mary Quist-Newins, a certified financial planner and associate professor of women's studies at The American College in Bryn Mawr, Pa. "[Women] don't feel like they're being understood or listened to. Some advisers have a tendency to talk rather than listen."
To serve female clients better, advisers should listen more and talk less, said Ms. Quist-Newins.
"Women are people of language, so they really want someone to listen to them, to arrive at the conclusions rather than have someone solve the problems for them," she added.
ROAD MAP TO VENUS
A needs-based consultative approach works best for female clients, Ms. Quist-Newins said. That means beginning with a clear identification of the investor's primary goal, detailing all routes to that goal, regularly monitoring the progress and then maintaining frequent contact with clients to ensure that nothing gets lost on the way, she said.
Ms. Quist-Newins is The American College's State Farm Chair in Women and Financial Services, a position endowed by State Farm.
Advisers say they've learned to recognize the value of regular communication with female clients.
"Communication is a big part of [being a fiduciary], and there are so many complex financial terms out there," said Steven Elwell, a financial planner at Schroeder Braxton & Vogt Inc. in Amherst, N.Y. "I would say that our women clients are more trusting than our male clients. If you're on their side, they run everything by you and value your opinion."
Though he is chagrined by the findings that bankers and insurance agents are higher on women's list of trusted advisers, Mr. Elwell said he understands their devotion to their accountants, who are often the first financial professionals that investors encounter.
"In my experience, women clients have been with these accountants for at least 10 or 15 years," added Mr. Elwell, whose firm manages about $223 million in assets. "When you work with someone for that long, you forge a good relationship."
ALPHABET SOUP
Another reason why women may trust accountants more is that they are familiar with the certified public accountant designation and less familiar with the many designations used by advisers Ms. Quist-Newins said.
"There is such great confusion among consumers on financial services providers," she said. "People are stuck not knowing which credentials are worthwhile. It's clear-cut with a CPA."
Such confusion may also be behind women's decisions to trust their bankers and insurance agents more than their advisers.
"So many people — not just women — walk into a bank and think it's safe," said Morris Armstrong, president of Armstrong Financial Strategies in Danbury, Conn. "They don't realize the cross-selling that's going on. They're buying securities and annuities from a banker, and they expect that person to act in their best interest."
However, Mr. Armstrong frowns upon treating women differently from men to develop a trusting relationship with them.
"Women might be behind the earning curve, but not the learning curve," said Mr. Armstrong, whose firm oversees about $15 million in assets. "They know a product sale line when they hear one, and they will run."
E-mail Darla Mercado at [email protected].
