Do You Listen to What I Want?

There is a growing recognition among financial advisors that women have different goals when it comes to economic strategy and planning but need to be given the level of importance they deserve. According to some of the latest studies by Forbes: “40% of women surveyed say their advisors often ignore or dismiss what they have to say, and 62% of women say their advisors don’t understand their unique investment needs.”

Bridging the Gender Gap & Understanding the Different Goals 

With over 50% of women changing advisors after the death of their spouses and up to 65% set to be the initial beneficiaries of the Great Wealth Transfer, it is clear many advisors are not taking note. Understanding women’s specific needs and requirements regarding financial planning, strategy, and security is critical to any financial advisor’s future success. Competent advisory firms have come to recognize these trends and are tailoring their approach and guidance to work with the needs of their female clients. 

Risk Perception and Aversion

Studies have indicated that women often exhibit a more cautious, risk-averse approach towards investments than men. This inclination towards risk aversion can be attributed to various factors, including a greater focus on capital preservation and long-term financial security. As such, when seeking financial advice, women prioritize strategies which include safety, stability, and minimizing the potential for significant losses.

But also be aware that while this is generally true, it isn’t universally true. It would be dangerous to assume everybody thinks alike. As a financial advisor, you want to take time to ask your female clients where they stand regarding risk. Get a baseline understanding of what they have in mind, and spend time going over detailed strategies and how they would affect their financial goals.

Long-Term Financial Goals

The latest studies indicate women are more focused on long-term financial goals than men. When developing strategies, an advisor needs to be aware of how women prioritize planning for the future, whether it involves retirement savings, insurance, education funds for children, or legacy planning. 

When seeking financial advice, women are likely to prioritize strategies that align with their long-term objectives and provide financial security for themselves and their families. For example, what if your prospective female client is expected to be her mother’s caretaker? As a financial advisor, have you considered taking time to review legal documents that will empower her to do so correctly? Is there enough liquidity in her estate or her mother’s to handle potential care costs? Where are those documents stored? Are they safe? Do they provide enough information and authority for your client to act?

Emotional Resilience

The financial advisory field is nearly 70% male-dominated, which may explain why challenges faced by women often go unrecognized in planning and communications. Honoring women’s emotional resilience in financial decision-making and realizing they encounter distinctive hurdles, like the disparity in wages between genders and breaks in career progression due to caregiving duties, can go a long way in showing them your advice understands their needs. This resilience influences their approach to seeking the right financial advisor who understands their needs and provides empathetic support during challenging times. 

Collaborative Decision-Making

Collaborative decision-making is another notable aspect to consider. Research suggests that women often prefer a collaborative approach to financial planning, seeking input from family members, friends, and trusted advisors. When seeking financial advice from a professional, women value advisors who listen attentively, involve them in the decision-making process, and offer personalized solutions that reflect their unique circumstances and preferences.

Education and Empowerment

Education and empowerment play an essential role in women’s approach. Women recognize the importance of financial literacy and empowerment in making informed financial decisions. Over 40% of women surveyed say their advisors often ignore, patronize, or dismiss what they have to say. They value advisors who prioritize education, provide clear explanations of complex financial concepts, and empower them to take control of their financial futures.

Blended Family Estate Decisions

Determining the dispersal of an estate between a second spouse and children from a previous spouse can be challenging for either gender. However, it affects women more than men, which is not something we see too many advisors discussing. It is difficult for anyone to choose their spouse to receive an asset over a child. However, making no strategy will almost guarantee fights and expensive litigation. 

Even the best estate plans can be challenged in court. 

One might assume Lisa Marie Pressley had the best advisors (legal and financial) money could afford. Yet a single, mysterious, hand-written Trust amendment upended all that planning and resulted in costing the Graceland Estate over $ 2 million when Lisa Marie died last year. 

More than just setting out clear designs in an estate plan is required. Finding ways to protect those plans from fraud, loss, and forgery has become just as important as the plans in this digital fraud age and endless litigation. Ensuring family members have the latest document and are alerted to any changes means your client’s wishes are honored, not fought over. Consider helping clients register their Trust. Not a simple document scan, digital registration protects the document from unwanted or fraudulent changes and prevents much of the costly litigation and family destruction that results from inheritance disputes. This is a fantastic way to demonstrate your office prioritizes issues at the top of mind for women!

Understanding Leads to Long-term Business Relationships

Understanding women’s unique behavioral finance traits is essential for financial advisors seeking practical guidance and support for female clients. By recognizing the emphasis on risk perception, long-term goals, emotional resilience, collaborative decision-making, education, and estate planning, advisors can tailor their approach to meet the particular requirements and desires of female individuals seeking financial advice. Ultimately, by fostering a deeper understanding and appreciation of these traits, advisors can empower women to achieve economic success and security while enabling their businesses to thrive.

The article was written by Matt Everson, CCO –  illuminote