Women’s History Month ends on March 31, but women are making their own history every day of the year. As a member of the leadership team at Frontier Asset Management, I wanted to learn more about how this plays out in the fields of advising and investing, so we asked three female financial advisors who offer Frontier investment strategies about their perspectives on the unique needs and opportunities that come from serving women investors.
The first universal and obvious observation was that there is no stereotypical “woman investor” – each individual is different in their needs depending on their situation.
“First, get to know the client before making assumptions,” said Darla D. Main, CFP, AIF of Main Advisory Inc. out of Pittsburgh, PA. “Good conversations that aren’t about money or the size of her portfolio will most likely reveal her interests and passions. An advisor can then search for the best investment strategy to fit the client preferences.”
But there are some trends and observations that a smart advisor should keep in mind and explore when working with clients who are women.
Women are a force in financial matters
According to McKinsey, much of the $30 trillion in financial assets currently held by baby boomers will soon be controlled by women in America.[i]
“Women currently control more money and spending than many realize. Currently women make over 80 percent of buying decisions and control over $20 trillion of annual consumer spending,” noted Nancy M. Corrigan, CFA of Corrigan Financial, Inc. out of San Francisco. “What is “new” is getting women to spend more time (and possibly money) on investing topics and focusing on the long-term.”
Why is this? First off, there simply are more women who are engaged in investing than in past decades, either as contributors in a dual-income household or on their own. More women today choose to live unpartnered and many women find themselves as head of household due to divorce or the passing of a spouse.
Importance of relationships, trust, and empathy
The value of a relationship built on trust and empathy is not unique to women, of course, but there are some trends that will add nuance to this part of an advisor/client relationship.
In her experience, Francine Jacoby, CLU®, ChFC® of Prudential Advisors in Indianapolis, said, “Women are more attuned to establishing relationships and trust before they are willing to divulge information and develop long-term relationships.” This makes time spent getting to know each other on a personal level especially important.
Main agreed. “Women often juggle family, work and caring for elderly parents simultaneously,” she noted. “This leaves little time for themselves and for managing investments, so it is important for an advisor to be trusting and empathetic – but definitely not condescending. Good listening skills to detect ‘what’s not being said, but implied’ are important.”
Unique considerations, needs, and situations for women
This tendency for women to be more likely to take on multiple caregiving roles in addition to work is one of the things that makes working with women unique, the advisors said. Another is the range of situations in which women might be engaging in investment activity with an advisor for the first time later in life.
“Divorce (the ‘Silver Tsunami’) is real and many women are finding themselves forced into a role they have not had – so feelings of doubt, insecurity, fear may all pop up,” said Corrigan. Women who have been widowed also can have the same experience. In these cases, there may be a need to fill some knowledge gaps, which must be handled with sensitivity and not as a lecture.
In some cases, Corrigan noted, women may learn only after the fact that a former partner had made poor decisions, or that there is less money than expected – this is when its vital to provide a high level of service to help get them on the right path.
On the other end of the spectrum, Corrigan said, many younger women live unpartnered, many do not have children, and so need service and advice that will differ from that of partnered women or parents. Understanding those situations (and being sensitive to them, for example by avoiding terms like “childless” that imply something is missing) is part of working with women in diverse life situations.
Tailoring investments to the individual
As part of delivering the personal service advisors seek to provide, it’s important to find what is important to a client. Men and women alike may be motivated by the same things, so an advisor shouldn’t assume women are more likely to prefer certain risk profiles or have a certain attitude toward values-based investing. But neither should they treat all clients the same.
Jacoby believes women may be more attuned to values-based investing since they are more likely to have engaged as volunteers with mission-based organizations – if you get to know a client on a personal level, you may be able to learn about this detail.
Corrigan noted that many women she works with are goals-based in their investments – they have things in life they want to achieve through investment, such as paying for kids’ college or starting a business – and after seeing to it that they are on track for goals may be open to discussions on values-based investing. “While it’s tempting to generalize what ‘women want,’ it’s more important to find out what a particular woman specifically wants,” Corrigan said.
Ultimately, that should be the goal of advisors: Treating each woman investor as an individual and providing tailored recommendations. With the many challenges women face today, advisors are in a unique place to help.
“Caregiving can suck up a lot of a woman’s resources monetarily, emotionally, and physically,” Main said. “An advisor can walk alongside to offer financial guidance and encouragement.”
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