The financial industry has a woman problem, says Alexandra Lebenthal, CEO and president of the wealth management firm Lebenthal Holdings, and it’s about to get bigger, as women manage more wealth. “There’s always been a disconnect with how to reach out to female investors,” she says. Back in the 1990s, firms used pink and purple brochures to attract female clientele, and they’re still struggling to find the right tone, she says. “You have to approach it from a woman’s perspective and understand how a woman thinks. … I still think everybody is searching for that missing link.”
One solution is to rely more on women advisors, Lebenthal says. Yet she acknowledges that isn’t easy to do, given the dearth of double X chromosomes in the field. The Certified Financial Planner Board of Standards has even launched an initiative to attract more women into the profession after noting they currently make up just 23 percent of CFP professionals.
For her part, Lebenthal launched a new quarterly digital magazine, Sayra, aimed at the 90,000 women financial advisors currently in the field. She hopes that women advisors can learn from each other and gather tools to help them build their assets under management — and serve their women clients better, too.
Lebenthal is not the only one in the financial services field who has noticed just how important female clients are, and increasingly so. A 2012 report from the financial firm Pershing found that women control two-thirds of annual spending in the country (about $12 trillion), and 8 in 10 will be in charge of their household finances at some point in their lives. Women, though, also say they are “less satisfied” with financial professionals than men, and they are less likely than men to say that their financial advisor makes them a smarter investor.
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In recognition of this growing female market, many financial companies are making more of an effort to appeal to women. Citigroup launched Women & Co., which features online content for women about managing money, careers and family life. SunTrust Bank hosts educational events that feature “topics that would have unique appeal to women and create an environment where women feel comfortable asking questions,” says Leah Wehinger, SunTrust Private Wealth Management senior vice president. TIAA-CREF offers webinars directed at women, like “She’s Got It: A Woman’s Guide to Saving and Investing.” Last year, Fidelity launched a program called “Engaging Female Clients,” featuring workshops, white papers and a guidebook for advisors.
Linda Descano, president and CEO of Women & Co., says her unit was formed after Citi heard from executive-level women at a conference that they felt the industry spoke down to them. “We spoke at them, not with them, and we talked about products, so we sounded very self-interested,” she says. Citi launched Women & Co. to offer women “resources for the different roles [women play] and the opportunity to talk back to us,” she says. In addition to the website womenandco.com, the group also interacts with women on Twitter (@WomenandCo) and LinkedIn.
“It takes longer to interact with female clients, but the payoff is there. They’re loyal, and they refer more than men do,” says Anne Long, president of NFP Life, the insurance arm of the financial services company National Financial Partners. She also encourages advisors to focus on the financial security the products they’re selling can create, because that tends to be important to women. “Women will always rate having enough money in retirement and having security and safety highly; men are more about wealth and empire building,” she says.
“In my experience working with women, we want to be treated the same. We just want to know that we’re OK… do we have enough money to be financially stable and financially independent? That is a general human feeling,” says Wendy Weaver, portfolio manager at FBB Capital Partners, a wealth management firm based in the Washington, D.C. area. The firm was founded by two women who noticed that when friends’ fathers passed away, their mothers needed help managing their finances. The firm focuses on women clients who are in transitional points in their lives.
Read: [Where Are the Female Financial Planners?]
SunTrust’s Wehinger points out that some gender differences are worth emphasizing when it comes to talking to women. “What we sometimes overlook is that not only do women have the same financial needs as their male counterparts, but they’re also juggling multiple roles, like caregiving,” she says, adding that women also tend to be the household money manager for their families, which includes budgeting and bill paying. She says acknowledging those multiple roles without stereotyping women can help engage potential clients. Wehinger also notes that 45 percent of SunTrust advisors, who manage high net worth clients, are women. “So we positioned SunTrust as a bank that is acutely aware of the needs of women clients.”
For women searching for the right advisor, here’s what financial experts recommend looking for:
1. Someone who focuses on your goals.
Weaver says when she starts working with a client, she focuses on her big goals, whether it’s saving for college for children or switching careers. Then, she can help her clients develop a plan to meet savings goals. “Let’s talk about the big picture and then get down to the small picture,” she says. Focusing on tangible goals can also help take emotion out of the equation and make the process of developing a financial plan less intimidating.
Descano of Women & Co. recommends treating the process of finding an advisor like hiring a new employee. “Interview a couple different people, and go through a planning exercise with them. A lot of it comes down to a gut reaction,” she says.
2. An advisor who is easy to talk to.
“Women should look for advisors who are collaborative. Our studies indicate that women want to be part of the decision-making process and to have an active dialogue with their advisor,” Wehinger says. Talking at least four times a year is a good place to start, she adds.
Women should also avoid anyone they feel is talking down to them. “Women don’t want the presentation to be dumbed down for them,” Long says, adding that women have often done a lot of research on potential financial products before even meeting with their advisor, which makes condescension especially grating.
See: [11 Money Tips for Women]
3. Someone who encourages lots of questions.
Women sometimes don’t want to ask questions for fear of seeming “stupid,” says Lebenthal, and that means advisors need to be proactive to make sure their women clients are engaged in the discussion. “People need to understand that you need to talk to a woman differently. She’s not always going to stop and ask questions; you have to be really attuned to body language and notice when her eyes glaze over and say, ‘I think I just lost you. Let me go over that again,'” Lebenthal adds. “It’s really about the personal relationship. It’s being very aware of that moment when you can lose the woman or you can stop, hold onto her, hold her hand and repeat what you said, and acknowledge that she’s not supposed to know everything. If you do that, you have her for life.”
Those kind of conversations can lead to a lasting relationship between client and advisor — and one that’s beneficial to both parties.
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The Finance Industry’s Plan to Court Women Customers originally appeared on usnews.com