To Work With Next Generation, Retain Their Mom As A Client

While our goal is to lead all our clients toward prosperous financial futures, it’s important to recognize that not all individuals — including women — have always benefited equally from these services. Despite our best intentions, female clients frequently have been ignored or excluded from the financial planning process for a variety of reasons. It’s on us as advisors to do our part to ensure they are actively included going forward.

Benefits Of Empowering Female Clients

In many cases, female partners of male clients have taken a back seat when it comes to financial planning. And while there are obvious reasons as to why this is problematic, it also poses a threat to financial advisors. Research from Transamerica shows that, after their spouses die, 70% of widowed female clients replace the family’s financial advisor with a more female-friendly advisor or turn to fellow widows for recommendations. This statistic highlights the need for advisors to actively engage with their female clients to ensure retention and protect their business in the event of a passing.

On the other hand, female clients have demonstrated more loyalty to their financial advisors compared with male clients, with a Penn Mutual survey finding 72% of female clients never change advisors when they feel valued and heard. Women also tend to bring in more referrals — bringing in an average of 26 referrals over the course of their lifetime compared with an average of 11 referrals coming from men, according to CNBC writer Andrew Osterland.
It’s also important to recognize that women, who typically outlive men, serve as the gateway to the next generation. So if you want to work with the children, you need to retain their mother as a client.

Men And Women Have Different Financial Needs

Advisors must understand the unique challenges their female clients face and how these challenges impact their financial needs. Because women traditionally act as the primary caretakers, they tend to put in fewer years in the workforce. On average, men spend 40 years in the workforce, whereas women spend 27 years, according to SmartMoney. Financial advisors should be aware of this trend and recognize that female clients may have a deficit when it comes to saving for retirement.

This disparity, along with the wage gap and the tendency for women to live longer than men, presents unique challenges for female clients. Financial professionals should be equipped to advise their female clients on how they can financially account for these variables.

How To Better Engage With Female Clients

1. Be a patient listener. Do the opposite of what previous generations of male financial professionals may have done. Listen more than you talk and don’t jump in with a solution.

2. Establish a trusted relationship. Look for common values, interests and acquaintances. Let her know about you and your family and share how you’ve helped others in similar situations — but keep the focus on her.

3. Be a patient educator. Use straightforward language and less jargon. Understand that women tend to ask more questions than men do and may want details. Encourage questions and let her know you’re happy to follow up or talk again if she has more questions later.

4. Take things off her plate. She may be juggling her own work schedule, kids’ schedules, in-laws’ visits and 50 other things. If you can make the process of having a financial plan or buying insurance easier for her, she may appreciate that.

Although some male advisors may fear that women prefer to work with a female advisor, research shows that’s not the case. According to the book The $14 Trillion Woman, 85% of women are gender neutral when it comes to choosing an advisor, with half of the remaining 15% preferring a male advisor.

Like all clients, female clients want to be heard, understood and recognized for who they are. It’s on us to be better listeners and educators while being cognizant of the challenges women may have had when it comes to working with advisors. We must provide women with reliable and relevant information so they can make informed decisions about their financial planning.

Michael S. Ross is a 17-year MDRT member specializing in retirement, estate planning and financial planning for women. He is the owner of Cornerstone Financial Group in Lexington, Mass. Contact him at [email protected].