Categories
Practice Management
Better engagement: How advisors can empower female clients
Leslie Geller
Senior Wealth Strategist
Rita Lee
Partner, Cerity Partners

Most financial professionals realize that attracting and retaining female investors is an important aspect of growing their practice. But the magnitude of women’s impact on the wealth management industry may still be underappreciated. Capturing the enormous growth potential that women represent requires more than simply refocusing current marketing and engagement tactics on this demographic group.

KEY TAKEAWAYS
  • Women represent an increasingly important economic force and source of growth for advisory firms.
  • Advisors should recognize that female clients may feel underserved and desire greater personal connection with their advisors.
  • Building stronger relationships with female clients requires being thoughtful, proactive and intentional in how you help them take control of their financial futures.

Most financial advisors realize that attracting and retaining female investors is an important aspect of growing their practice. But the magnitude of women’s impact on the wealth management industry may still be underappreciated.


A 2020 McKinsey & Co. study found that women in the U.S. control $10.9 trillion in assets today. This sum is expected to increase to about $30 trillion by 2030, a seismic wealth transfer driven primarily by demographic factors. McKinsey’s analysis shows that “simply by retaining baby-boomer women as clients, firms could see one-third higher revenue potential.” Further, advisory firms that “acquire and retain younger women — especially millennials — as clients could see up to four times faster revenue growth.”


Capturing the growth wave that women represent, however, requires more than simply refocusing your current marketing and engagement tactics on this demographic group. It starts with understanding that women may approach financial decisions differently than their male counterparts, and many don’t feel as empowered to take control of their financial futures. It also requires taking a systematic approach to assessing and meeting the needs of female clients and being proactive in engaging with them in ways that provide support along the path to financial empowerment.


Understanding differences across and within genders


While it is important for advisors to foster a sense of financial empowerment among all of their clients, advisors need to be especially attuned to the possibility that married women may feel like they are taking a back seat in the couple’s relationship with their financial professionals. “For couples, statistics show that women — even female breadwinners — tend to defer to their spouses regarding major financial decisions such as investing and estate planning,” said Leslie Geller, wealth strategist at Capital Group. “One reason is that relationships with wealth advisors, attorneys or CPAs are often initiated by the husband. Women tend to be outsiders to these already-formed relationships.”


Geller said that this can cause women to feel that they aren’t a top priority in these relationships, or worse yet, that they aren’t even part of the team. “Advisors should proactively identify ways to help bring women into the fold,” she said.


Advisors should also understand that women are likely to approach financial management differently than men. The McKinsey study showed that “women are more concerned than men in regard to meeting their financial goals” across topics such as health care, outliving assets in retirement, lifestyle maintenance and rainy-day funds. Women are also more likely than men to emphasize personalized and outcomes-based financial advice.


“Women tend to be more engaged with financial decision-making when they experience life milestones or key transitions, such as marriage, a new baby, divorce or the death of a loved one,” said Rita Lee, principal, vice president and director of research at Brouwer & Janachowski.


Lee, who is also a member of the inaugural Capital Group RIA Advisory Board, added that advisors should be attuned to potential generational differences in how women approach financial management. “Traditionally, a family’s financial duties have been split between managing household finances and managing investments,” Lee said. “For the boomer generation, it’s the men who tend to take care of both. In younger generations, however, women increasingly share or lead financial decision-making, especially the investing component.”


A playbook for better engagement


There are practical steps advisors can take to attract, retain and better serve women — and capture more of the massive wealth transfer that is anticipated in the coming years.

  1. Identify areas of unbalanced engagement. Identify your client relationships where the engagement with a couple is unbalanced. Even if the husband did, in fact, establish the client-advisor relationship, the wife needs to have a personal connection with the advisor as well. This involves thoughtfully assessing whether both clients are fully engaged and informed about the financial plan — both the bigger picture and the details. “Don’t assume that there has been a seamless sharing of information between the couple,” Geller said. “And don’t assume that you can assess a client’s comfort level or extent of financial knowledge based just on the questions he or she does or doesn’t ask during your meetings.”

  2. Probe for blind spots. Rather than waiting for your clients to come to you with questions, advisors should initiate conversations that can reveal areas where a client feels uncertain or wants more information. Select a topic — such as ownership of assets, estate planning documents or financial statements — and discuss with your client the potential pitfalls of not being fully informed on the subject. “Instead of putting the responsibility on the client to come to you, take the initiative to search for potential blinds spots or areas of concern,” Geller said. She added that an effective way to do this without putting the client on the spot is to talk about hypotheticals. “It’s helpful to pose questions such as, ‘What would this financial statement look like if your husband (or wife) were to die in 10 years? We haven’t talked about this before; we probably should,’” Geller said.

    One way that advisors can improve engagement is to help clients ask the right questions. These questions were written from the perspective of married women, but they can be adapted to fit any client’s situation.

  3. Build connection into your process. Analyze your client engagement procedures to identify changes that can be made to more actively involve both members of a couple. Some of these changes may be as simple as addressing emails to both spouses, rather than putting one spouse in the “To” line and the other in the “CC” line. Another example is requiring that both spouses attend (virtually or in person) meetings or document signings. “It may be somewhat awkward to tell the couple that you’re suddenly implementing a process change after you’ve already worked with them a long time,” Geller said. “But be open about why this change is happening and explain why this is important.” Further, if the couple agrees that it would be helpful, set up time to meet with each spouse one-on-one, without the other present. Explain how this is an opportunity for each client to discuss matters from their own perspective and in their own words, which can be extremely helpful in further addressing each client’s goals, concerns and questions.

  4. Focus on life events. Critical transitions in clients’ lives can be powerful opportunities to strengthen your relationships with women. For instance, for a female client preparing to get remarried, the advisor is in a position to motivate her to address important financial issues — such as estate planning updates or blended family concerns — prior to the big day. For a client going through a divorce, the advisor can help to raise time-sensitive considerations or handle administrative tasks to ensure that terms of the settlement are fulfilled, as well as develop new investment, retirement and liquidity strategies to reflect the client’s new financial circumstances. Finally, it is paramount to help all clients prepare for life’s unexpected events, such as the death of a spouse.

    “We have counseled widows who inherited a financial empire, with ownership stakes in family businesses and piles of documents in a vault that they never knew about,” said Lee. “These situations can be very challenging and stressful. Proactively engaging with financial professionals can help female investors establish the strong relationships they need to manage life events and to limit the pain of an already difficult situation.”

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Advisors have the opportunity to make a significant impact on the financial wellness of all of their clients — male and female — through better engagement. But advisors shouldn’t assume that this will happen naturally over time, and they shouldn’t assume that the same tactics that have been effective with male clients will be equally effective with female clients. Advisors who want to capture the wave of growth that women represent need to be thoughtful, proactive and intentional in how they foster strong relationships with female clients and help them take charge of their financial futures.


For more insight on this topic from the investor’s perspective, please see “Be empowered: How women can guide their financial future.”



Leslie Geller is a senior wealth strategist at Capital Group. She has 17 years of industry experience and has been with Capital Group since 2019. Prior to joining Capital Group, Leslie was a partner at Elkins Kalt Weintraub Reuben Gartside LLP. She received an LLM in taxation from New York University School of Law, a juris doctor from Boston College Law School and a bachelor’s degree from Washington and Lee University. Leslie is based in Los Angeles. 

Rita is a partner with Cerity Partners and is based in the Mill Valley office. She provides comprehensive investment and planning advice to high net worth individuals and their families, businesses and non-profit organizations. Rita works with a wide array of clients and has expertise in working with professionals, tech executives and business owners. She has deep experience helping clients reach their financial goals through customized asset allocations and strategies that participate in growth markets and protection in down markets.


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