Client Relationship & Service
35 MIN PODCAST
It’s well past time wealth management firms ditch the pink-hued swag and take women seriously as clients. So says Heather Ettinger, who runs Luma Wealth, an advisory firm created out of Fairport Wealth in 1990, and is dedicated to empowering women and their families. The Cleveland-based enterprise has about $4 billion in assets under advisement.
Using the framework of “learn, connect, celebrate,” Luma aims to provide women with advice and resources to help her run their lives, not just build an investment portfolio. For example, in addition to estate planning attorneys, Luma will connect women clients to resources that can help them care for aging parents. Why? “We know that over 80% of elder care, for example, is managed by women,” Ettinger says.
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.
Angela Shah: Hello, and welcome to the PracticeLab podcast, where we talk to top advisors about what makes them successful, so that you can apply those lessons in your own business.
I'm your host, Angela Shah. And today we are talking to Heather Ettinger of Luma Wealth, a comprehensive Cleveland-based wealth management firm that focuses on serving women, not as a niche market but as a diverse group that deserves personalized wealth management services to match their specific needs.
In this episode, you’ll learn how Luma’s “learn, connect, celebrate” model elevates client service to focus not just on money itself, but the client’s vision that will be supported by a financial plan; how the “money messages” she received growing up influenced her career; and how she uses that experience to help other women manage their money. And she has some tips for her male counterparts on how they, too, can and should find opportunities in this important but underserved market.
So, grab your coffee, and let’s head into the PracticeLab.
Angela Shah: Heather, welcome to the PracticeLab podcast. Let’s get started by having you tell us about Luma Wealth, its founding and its mission.
Heather Ettinger: Sure. Needless to say, a question I love and happy to talk about it. So, in terms of my background, I've actually been serving women and their families for over 30 years and got into that space through some work with women's foundations originally. And over time built that practice, recruited my best competitor in town, Emily Drake, who started McDonald Trust Company. And that went through a transition and gave us an opportunity to start working together. And it's now been 20, over 20 years that we've been together. And fast forward: We really are a team of men and women serving women and their families.
The reason we launched Luma four years ago was that we had a thriving practice. But what we really wanted to do was codify it, and take it to the next level, with a very clear message to women that the name Luma really represents what we're trying to bring to them, which is transparency, accountability, and a true understanding of what is unique about the needs of women and their families.
And so, as such, it has really three components to it. We use the tagline “learn, connect, and celebrate.” So the "learn" piece is both based on the thought leadership work that I have done, which includes a study, my first study, that's where 96% of over the 500 women that were interviewed said, before you give me advice, you better demonstrate that you have a good understanding of what's unique about me and my family. So that's part of “learn,” really learning what's unique about her in the family. The other piece is the women's need for financial literacy. But not just financial literacy in and of itself, but in a style where she can learn best, that provides a safe environment. That's a lot of sharing of anecdotes, and stories, and scenarios, which is typically how women learn best, and some other connective exercises. And those programs include everything from basic financial planning concepts, to more sophisticated concepts, to negotiating, etc.
And then the second, “connect,” so of course we connect the women to traditional service providers, which would be CPAs, estate planners, insurance agents, etc. But we also connect her to nontraditional resources, because one of the things that we're solving for with Luma is the fact that she's running the life of the family, no matter if she's a stay-at-home mom, or if she is a "PANK" (professional aunt, no kids), or if she is the breadwinner, the primary breadwinner in the family. Even those women are doing over 70% of the, if you will, family-needs chores. So, what do we have to do? Well, we have to save her time. And one way we do that, in her running the life for the family, is we connect her to nontraditional resources. We know that over 80% of elder care, for example, is managed by women. So, providing her with elder care resources, or it may be an employment attorney, or it may be, where do I get my kid tested for learning differences? So all sorts of, if you will, nontraditional resources that help her manage the life of the family. And then the other part of “connect” that's really, really important is women love a sense of community. They love being connected with their like-minded and like-situation women. So we do just that. If it's a woman going through a nasty divorce, we're going to connect her with women that are maybe three to five years out, maybe even longer. So that she starts to have that empathy factor, not just our sympathy and hopefully empathy going through that life transition. But other people have actually been through a similar transition. Or maybe it's “Luma Luminaries,” which is our business-owner group. In that case, we're providing, once again, a safe environment for them to connect with each other. So they're no bankers there, or accountants, or lawyers, or anybody else that might keep them from being open and vulnerable. And that gives them a chance to really build a strong community amongst themselves. So that's the other part of “connect.”
And then “celebrate” is absolutely celebrating big life events, awards, new jobs, major milestones in the family. But it's also about celebrating the family's legacy. And that's both in their lifetime, and even perhaps after they pass, and ways to keep that legacy alive with the remaining family members. And so we also do some unique things around that. So it's “learn, connect, and celebrate,” and really emphasizing what we've learned in over 30 years of working with women, and what's important to them.
Angela Shah: It's really interesting. What you're describing is so much more holistic and personalized then what you think of typically in financial services and wealth management. I'm curious: Why isn't this approach more widely used? Why is it not more prevalent in the financial services industry? Do you see that changing?
Heather Ettinger: So I often say women are not a niche. And that's not only because we're over half the population. But it's because, let's take the two of us, we're at different stages of life. We're facing different transitions; we're facing different challenges. And so, to come to both of us with the same approach, likely the only thing it would result in is probably both of us being offended, right? So it is really important that you understand what you're solving for, in whatever niche you may be serving. And also that you can really resonate with that niche, right? I mean, clearly, I resonate with, kind of, the breadwinner women, because I am one. I get it; it's a lot to juggle. Or I, for whatever reason, love the practice of working with widows. And it may be because I've watched my mom go through it. I've watched a number of women go through it, and it's just a group that I can really identify with. There are other niches that may not resonate as well with me, and that's OK. It's not saying one is right or wrong. But whatever one you're working with, what you really need to understand is, what are you solving for?
And there are some things that are universal to all women, like the lack of time. But there are other things that are really unique in working with that particular group. So, let's take widows for example. One of the things that we're solving for is that she may be learning a lot of these concepts for the first time, as she is also going through the grieving process. That is not a great combination. So, what else do we need to do to help her through that process? Well, for us, one of the things that we do is we ask her to bring a trusted family member or friend to come to the meeting with her, because she's not going to hear a lot of what we say, because it's just a function of where she is, right? Yeah. So that might be one tool. We also go through and we create a whole transition plan with her other advisors so that we take as much off her plate of the, if you will, technical little nitty-gritty stuff that she doesn't necessarily have to be involved in. And we clearly outline who's going to be in charge, what the deliverable is, and what the status is. And we bring that to her to help her, quite frankly, see that things are getting taken care of, and let her at least follow the process. We're not keeping her out of the loop. But we're taking as much as we can off her plate so that she can go through the grieving process.
Angela Shah: Because typically, this is a real point of weakness for many financial advisors. They have the relationship with, in heteronormative marriages, the husband. And they only really engage with the wife upon death. How have you approached that weak spot in the financial relationship?
Heather Ettinger: So when we're working with the widow, that is clearly a unique situation. Often we’re brought in by the estate planner or the accountant in that case. And the reason she changes advisors is pretty simple. More often than not, the relationship with the husband was built on an investment platform discussion. And when the new adviser calls her and says, “Hey, Angela, you should move out of this international fund and into this one,” she's kind of scratching her head going, “Isn't that your job?” And B, is that really what I need to be focused on right now? I'd rather know, am I going to be OK? What are the key decisions I need to make? I have to go to the Social Security office. Are you willing to go with me? And a lot of those advisors aren't willing to do that because that isn't the relationship they built with her.
When we work with a family, one of the unique things about our deliverable, whether it's on the Luma side, or whether it's on the legacy firm side of Fairport, is we engage with all the family members. And that isn't simply inviting her to a meeting. You and I've both been invited to meetings where our voice is still not heard, even when we're talking, right? And so really, what it's about is spending the time to get to know her, spending the time to get to know what's important to her, and making sure we listen to her repeat back what we've heard. So she knows that she's been heard. And often it really includes both getting to know her kind of one-on-one, and also making sure we give her an opportunity to participate in that meeting in a way that is reinforcing, not condescending. And we actually, most ideally, have a male-female partnership on every engagement. Not every woman wants to be working with a woman, and not every man wants to be working with a man, right? And by looking at body language, you can often understand more about them and what their preferences are. And it's not judgmental. It's just you can also obviously understand what's being heard and what's not, when to stop the conversation and say, “Wait a sec, Angela, I want to make sure you understood what Joe just said.”
Angela Shah: Active listening, engaged conversation, as opposed to just sort of passive and not. You're almost planning the conversation based on what you are seeing and hearing, sounds like?
Heather Ettinger: Exactly. And then the other thing that we do is, with the Luma model, we have something called the Luma proven process. And one of the things that we do is there's a much deeper discovery process, but we ask them to talk about the money messages that they've received, and what's been kind of key points in their own money journey. And we do that because there are a lot of women who have received very condescending messages around their ability to manage money, some of which may come from, if they're in a traditional marriage, their husband. Some may have come from their father or mother. We want to know that going in because it will affect her relationship with her advisers.
Angela Shah: And I want to get into that because you've got a great story about it. But I was struck by what you're saying is applicable really for any type of woman. There's not one profile of woman, and not one set of needs.
Heather Ettinger: Exactly. And take PANKs, for example. In the first study I did, over I think it was about 32% of PANKs were actually supporting children in the next generation. So if an advisor comes in and says, “Not married, no kids, I'm going to assume there are no other financial obligations to the family,” they could be missing a six-figure plus number over time, which we know dramatically impacts the financial plan. So once again, assumptions are what often get advisors into trouble, because every woman is different. And how she chooses to be engaged with her own family, or friends, or community can be completely different. And so assumptions can get you in a lot of trouble.
Angela Shah: Let's go back to the money mindset. Tell us about your money mindset. I've heard this story before, but I love it.
Heather Ettinger: So you and I are both smirking. And people aren't going to be able to see that. But it's true. And my story is as follows: My earliest memory, and it was a very significant memory, was my mom and I went to New York. And we did what most women do in New York. We ate very well at wonderful restaurants, we went shopping, and we attended some fabulous theater productions. And when we came home, I was about 15-years-old at the time, my dad and my mom and I were going through the receipts of the trip. And my father turned to my mother in front of me and said, “Lois, you can't spoil Heather like that. No man will ever be able to afford her.” And I'm a rather feisty person, at which point, I turned to my father and said, “What makes you think I'm not going to be able to afford myself?” And ironically, my dad, who was in the industry, was raising me to be very independent. He was actually raising me very similarly to my brothers. But he also had, obviously, some old-school thoughts, and my mom did not have a professional career, although she volunteered and supported his career. And so, it was an early message to me. And I went about proving differently, of course, and I am the breadwinner in our family, and the primary breadwinner. And so I think it is something that we have to be very aware of, and how we carry that message forward.
And part of my message is to help women understand, really, that there are three key elements in the work that I've done over time. Number one is that even when it is her money, whether inherited or earned, our industry is still very condescending, uses a lot of jargon, and doesn't treat her, quite frankly, the way she should be treated, regardless of whether it's inherited or earned. It is her money, and it is not their money, and they should treat it as such. And they also should be aware of what they need to bring in terms of education, etc. The second is that women are the agents of financial literacy and values to the next generation. So it is important to engage them early. And we are starting to see some new trends where women are taking over family businesses at a higher percentage than we've ever seen in history, when it was often the son that was tapped. We're also seeing, of course, women being the primary breadwinner now in over 40% of families. And of course, women inheriting disproportionately, both because they're inheriting from the generation above them, and they also, if they're in a traditional heterosexual marriage, are typically inheriting from their husband, because 80% of women die single, 80% of men die married. So those reasons. And then lastly, and this is really my, if you will, Simon Sinek “why” to this day, that if we educate and show women how to claim the power that they actually already have, in their own finances, they're the agents of social change. And so that's really my ethos, to this day, is I'm going to find ways to educate her wherever she may be, and then help bring her forward to understand that she has power in her financial resources. And she has the power to decide how to spend it, how to invest it, and how to give it, as well, it back into her community.
Angela Shah: And you started to talk a little bit about, sort of, the condescending nature of communication, but also jargon. And I think I've seen you talk about a masculine communication approach, which doesn't work well. What is that and how does it not work?
Heather Ettinger: Sure. So I think one of the things that we do that's very unique at Luma, as I said, we start with this due diligence process and, and they're kind of money values, money mindset, money journey. And then of course, we talk about hopes and dreams and triggers, but we also put down in front of them six areas in a wheel. And basically, the values are in the center of the wheel. And the six areas if you look at it are on the outside of the wheel, and those include relationships, job, purpose, health, spirituality, community and play. And they're not all even and all, but when you put that wheel down, as opposed to what a lot of people in our industry put down in front of people (which is charts, or maybe a wheel that explains what wealth management is, which includes, of course, tax planning, financial planning, insurance, planning, all those things). You put that wheel down, and most people glaze over and kind of go, “Oh, great,” huh? You put our wheel down, and you say to her, “Talk to me about these different areas. What's on your mind? What are the highest priorities this year?” And, “What's keeping you up at night? What does this generate for you in terms of some questions or dialogue or important things that I should know about you and your family?” Completely different discussion, because you're meeting her where she is, where her goals are, what's important to her.
And often when I put this wheel down, people go, “Oh, you know what, I have decided to change how we are looking at education funding, and we probably should talk about that,” or “I want to build in a family trip every year. COVID has made me realize how important it is to be with my family more often.” And so we take that and then, by the way, the “what” is it is those six areas, and the “how” not the “what” we treat in this industry. The “what” is the money, the “how” is, yes, financial resources, but it's also human capital. How are they choosing to spend their time and talent? So I do think that's important. It's a big differentiator. And in our industry, we often start with the “what” being the money, and therefore getting us to investments, which is way too fast.
And by the way, when you get into this values discussion, other things may come out, like environmental, social, governance, ESG, or sustainability, or where my values. Oh, my gosh, I want to invest in other female entrepreneurs, or I want to be able to give more money in a more focused way. “How can you help me, Heather, create a charitable giving plan?” Things like that that wouldn't normally come up.
And then the last part of the proven process is actually laying out a calendar for the year that takes those priorities into account and says, “OK, here's how we're going to address them over the course of the year and an approximate timetable. Does that sound good to you, Angela? Yes or no? And then here are the education programs that we have along the way that I think are going to be of particular interest to you, because of what you've talked about. By the way, we're going to be doing a program on raising financially responsible kids. And you've mentioned that you want your kids being more responsible in their own right at a younger age, or your niece or nephew, or whatever it may be, you should listen into that program. And by the way, that's going to be on October 18. And we'll put that on your calendar. We're going to do these other things so that you actually have a game plan.” And I often joke, there's the book, ”What to Expect When You're Expecting.” It's kind of like that: You're laying out for them what to expect over the course of the year. And women often love a game plan. We may not follow it, because life interferes, right? But we do like to know what to expect, and therefore how to be best prepared, and what other resources might be available.
Angela Shah: One of the things that you’ve said is important to do, when working with breadwinner women, is, for example, working with that client’s HR department to make sure she’s taking full advantage of the benefits available to her. That strikes me as a bit far afield from the remit of a traditional wealth manager. Why is zeroing in on something like this important when working with women clients?
Heather Ettinger: Right, right. It's a very important point. So in the second study that I did on breadwinner women, and in this case, we did interview over 1,000 women, there were almost 40% of the women that said, “I know I'm leaving benefits on the table.” And why is that? Well, think about it, you have a 401(k) or 403(b) that's one provider, you have your health plan (that's another provider), you might have supplemental insurance (that's another provider), you might have an HSA (yet another one with). I could keep going right? Flex plans, all of that. And so, all of a sudden, you're saying, “Heather, here, six different meetings you need to go to learn about these benefits.” And I go, “Hey, great, I don't have time to go to one, and now you're asking me to go to six.” And by the way, most people are trying to sell me something else, which also, again, women don't like the sales approach. They like a learning approach. They like a journey, a partnership.
So what happens? They leave that money on the table. And that's why, for example, there's a lot of data that says women are more conservative. I don't believe they are. I believe what happens is in their retirement plans, the default is often the most conservative option, and probably rightfully so. And what's happened is women just haven't had the time to go through and figure out the allocation, right? Well, if we're truly holistic advisors, if we're truly wealth managers, we should be looking at all of her assets, whether we manage them, whether we don't manage them, whether they're liquid, whether they're illiquid, how the house, how the house is financed. And what's that current rate? Is that in her best interest, or the family's best interest? We should be looking at all of our plans. And all you have to do is say, “Hey, send an email to your HR director, copy me on it, and say, ‘I'm giving Luma and Heather authorization to go through my benefit plans.’” And what we do is we come back and we say, “Hey, Angela, we went through the plans, I pre-populated the forms for you. Here they are. Let's walk through them and talk about why I made the choices I did, and ensure that it, you feel that that's the right choice.” But we do that. And so we pre-populate it; we try to fill out her paperwork, where we can we actually even submit it. And that just helps save her time.
Again, on the filling out the questionnaire up front, you're absolutely right. I often joke, you send me a 30-page questionnaire, you're going to be sitting here five years from now waiting for me to fill it out. So what do you use? Aggregators, right? We use software that helps us aggregate the information in so that we make it as easy as possible to get an overview of everything she's got, where her spending is, what's working, what's not working, and really ensuring that we've got everything included there. And we've got the big, holistic sight line at 30,000 feet, and then we can swoop down and help in whatever area needs help. I think the biggest challenge we're facing in this industry right now is the misuse of titles and terms, right? People say they’re wealth managers when they're just looking at investments, and they're truly just investment managers. And think about it: If you were in the medical field, and you said, “I'm a brain surgeon,” and you're actually a general practitioner, that would be an issue. Why we let it go on in our industry? I don't know. But that's why in things like our seminars or my book, “Lumination,” I give resources, not only what to ask when looking for an advisor that might be more holistically oriented, but what to look for in the answer that you get.
Angela Shah: Tell us about these 20 questions that women should ask their financial advisors.
Heather Ettinger: Right? So I think, really, are you going to go through and ask all 20? Probably not. So the best thing to do is go through and look at those questions ahead of time and say, “What, what really resonates with me? What are the priorities?” So you're looking for somebody who has experience in working with someone that's like you, right? And what are the unique deliverables that they might bring? You might ask them, “Who's your ideal client, and why?” And I'm really clear about who our ideal clients are. If they're the self-directed investor, not a good fit with us, because I do want to be looking at everything. And I do want to come up with a strategy that we can follow. And I'm happy to be held accountable to it. But it can't be held accountable to somebody who's off doing other stuff that may not be consistent. And so we're really clear that we're looking for not just a certain demographic of client, but a certain psychographic of client, and that's what you're looking for in the answer. They're definitely types of clients that are not a good fit with us. And if they are, if we're solely driven by assets under management, that's going to lead us to a different behavior than if I'm an owner in the firm, and I'm looking for a long-term relationship. And you and I are making sure it's a good fit both ways. And so I'm much more focused on that and making sure that they're engaged, but they’re delegators; they're respectful; they're family-centric. They want a relationship. Certain psychographic elements like that, as opposed to just a net worth and investable assets, which to me is important. But that's not the driver of the decision.
Angela Shah: Tell me about how firms – say, a male advisor listening to this – can attract and better serve women clients? I mean, it needs to be about more than splashing pink on a website.
Heather Ettinger: I think there are a couple different ways you can go about it. One is to ask, if you have existing good relationships with female clients, why are they with you? What do they perceive to be the benefits? There's a pretty well-known statistic out there, too, that often the best time to ask those questions is in the first year that they've started working with you, because it's much easier for them to articulate what's different than their previous provider or non-provider. So it's a good time to ask it. So that's one thing to do. And then also ask, be vulnerable, “What are the gaps? What else should I be doing?” And I would often say, bring in a team approach, have a male and female in the room. And make sure that when you ask questions, you listen, and you echo back. You say, “Angela, this is what I think I heard you say. Is that correct?” So making sure that you echo back, rather than just keep talking. I would also say ask questions. And maybe, maybe you take 10% to 20% of the time to talk during the meeting, and you let her take the 80% to 90% of the time to talk.
The second is really look at the environment in your office space. So I often have a running joke about duck and dog prints. Now, my husband's a dog trainer. So I love dogs. But it's a very masculine looking office. Women make up their mind in the first seven seconds as to whether they're going to feel comfortable or not. Remember that, so when she walks through that door, does it feel like she's walking into a home and an inviting space? Or does it feel like she just stepped off into a men's club or men's locker room? And I know I'm overexaggerating here. But the point is very real. She may not even realize it, but she's making up, “Ooh, am I going to feel open and honest in this environment? Or am I going to have to watch what I say?” Also look at your website. Women are often using websites as validators.
I once had somebody actually trying to pitch my business. And their landing page was six white guys sitting around a conference table. I said, “You don't need to go any further, right?” And the guy said, “Well, we have all these bells and whistles.” I said, “I don't need to go any further. You've already offended me. And we're only at the landing page.” I said, “Not one of those people looks like me, and not one of those people looks different from anybody else around the table, which leads me to believe you don't want to hear a different opinion. And, and that's the image you've portrayed to me.” So I do think, you know, really understanding it.
The other thing I will tell you is: I hear a lot of female advisors say, “Hey, my male advisors do want me to build a practice in this area. But when it comes to having a budget, there isn't one, or they're giving me enough to throw a little party.” That's not what being in this business is about. She wants to know that you have a real commitment, that you actually are there to educate her, that you're actually there to listen and provide services that meet her needs and the needs of the family. And that may mean that you need a team with not only diversity of gender, but diversity of age. I am very, very clear that I bring in younger advisors, since I am more of the senior stateswoman at this point, because I look at the next generation and I go, “Yeah, I mean, you look at me as your mom and dad's advisor, or your mom's advisor. You don't look at me necessarily as your advisor, because chances are, I'm going to be retired by the time you really need me.” So really thinking about that as well. And so it's got to be advisors who are comfortable with themselves and can be vulnerable.
Angela Shah: That's great. Well, thank you so much, Heather, for joining us today in the PracticeLab. It's been a pleasure talking to you about your work.
And that’s the end of this episode of the PracticeLab podcast. I want to thank my guest, Heather Ettinger, for joining me. Thanks also to Jeff Malbasa at Capital Group for bringing Heather to our attention.
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Time equals money
Women, as breadwinners or not, are typically responsible for the lion’s share of running their families, Ettinger says. So they don’t have time, for example, to review the multiple benefits providers they have, much less attend meetings about them. “We interviewed over 1,000 women, and almost 40% said: ‘I know I’m leaving benefits on the table,’” Ettinger says.
Given that reality, Luma will ask the client for permission to interact with her company’s HR department, review her benefits and put those into context with the rest of her financial picture, such as the interest rate on her mortgage. “If we’re truly holistic advisors, if we’re truly wealth managers, we should be looking at all of her assets — whether we manage them, whether we don’t manage them,” Ettinger said. “We provide an overview, and we save her time.”
One size fits none
“Women are not a niche,” Ettinger stressed. Instead, advisors should focus on what problems they can help women clients solve. Stop to consider what her particular life circumstance is and how you relate to it.
“I clearly relate to breadwinner women, because I am one,” she said. “I love the practice of working with widows. And it may be because I watched my mom go through it.”
While shared experience can be a good way to relate to women clients, Ettinger cautions against making assumptions about other profiles of women. Consider “PANKs,” (or “professional aunts, no kids”). “If an advisor comes in and sees ‘not married, no kids,’ they could be missing a six-figure-plus number over time,” Ettinger said.
“About 32% of PANKs were actually supporting children in the next generation,” she added. “Every woman is different, and how she chooses to be engaged with her own family, or friends, or community can be completely different.”
Ettinger stresses that men also have a role in serving women clients. “We actually, most ideally, have a male-female partnership on every engagement. Not every woman wants to be working with a woman, and not every man wants to be working with a man, right?” she said. “And by looking at body language, you can often understand more about them and what their preferences are.”