Barron’s featured a story recently calling financial advisors to improve services and financial education for women. The article subtitle is “When will the financial services industry learn to treat female clients better?” which feels a little like victim hood for women, but read on.
It states that the current lack of engagement with female clients by financial advisors is a problem with a huge opportunity that is being missed. It also suggests that change is forthcoming.
Research shows that most current marketing materials and communication, however, are still geared toward the male brain, and, yes, there are telling differences between the brains of men and women based on science. These brain differences innately call for increased communication, education and establishing trust as core focuses for engaging with women successfully in business. (Financial advisors, click here to get my ebook on communicating better with women.)
Fortunately for the financial industry, technology makes this faster and easier than ever before with the ability to create highly engaging and informative visual presentations beyond pie charts and data, shared via ongoing communication through newsletters and social media. Many wealth management firms are already capitalizing on this dynamic successfully.
According to Anne Copeland of Regions Financial Corp, and a women and wealth study by Regions and Vanderbilt University, men like to learn financial insights on their own, but women seek feedback and guidance from others. Copeland recommends that marketers for financial professionals remember this, and encourages financial education for women as a focus area because women really like learning; they like to have information and research so they don’t make mistakes.
Financial education for women, specifically, is gradually happening, but the fact is that the financial industry is still very much male dominated due to low entry into this area on the chosen part of women. In consulting with financial advisors to help them craft their communication in a more engaging way, I’ve learned that they are generally very excited to share their expertise, but the words come out naturally as financial lingo. This is because it’s the world they live in, but material can easily be reworded into every day language and situations to which their clients relate, especially women.
Let’s remember that financial experts live in a world of data, analysis, and use a special language related to that world. You may have seen this same dynamic with technical experts, doctors or other math or science related experts. They live in a left brained world. In other words, there is no deliberate talking above their female clients’ heads. (And if an advisor IS deliberately talking above your head, it’s easy enough to move on to another financial advisor that communicates in a way that you like.)
Nevertheless, a study by the Harvard Business Review called The Female Economy stated that women are still disappointed by the quality and service offered by financial companies, which still assume men are their target customers. It was further stated that financial services were noted as the industry that is the least understanding of women, but also as having the greatest opportunity by changing their approach with women.
An extensive study done by Allianz Life showed that women are hungry for knowledge about retirement planning and 57% of them say that fear of running out of money keeps them awake at night. It also showed that a need exists for more clearly written and engaging financial education for women, and a large 69% of women who use financial professionals don’t view them as a “go to” source for information on investing, spending and saving. Ouch!
These facts in no way alleviate a woman, however, from learning what she needs to know to confidently lead her wealth. Fortunately, this wealth leadership movement by women is gradually happening now, partially as a result of the huge number of successful women owned businesses. Consider, too, the funding of $16.5 million in 2013, then $28 million subsequently received by Alexa von Tobel when she successfully launched LearnVest, a site originally geared toward financial education for women. Later, Northwestern Mutual acquired LearnVest for $250 million. Then there’s the case of Amanda Steinberg raising $850,000, and later another $2 million in 2013 for DailyWorth. Clearly, well-funded efforts are being made toward financial education for women.
Here’s the thing, and as a woman, I get to say this: It is not a choice for women to not only embrace this increasingly growing position of wealth leadership, but to have sheer gratitude for the opportunity to manage and oversee wealth that women have not previously experienced. Everyone is busier than ever; but with what, and is it more important than your financial security? We simply cannot use excuses for not embracing our financial prowess by saying that we’re too busy, or stating the fact that the financial industry is male dominated and oriented.
The performance of your investment portfolio is just that, regardless of whether or not the education needed to evaluate it comes in an engaging and visually appealing way. If it does, that’s great, but a broad knowledge of stocks, bonds, the index concept and a benchmark as a simple performance measurement tool are basics that every investor must know and use, male or female, regardless of how it’s learned. Choosing to self-invest or hire a financial advisor, and understanding how that advisor works and performs is a responsibility and an honor if you are so fortunate to be in the position of having the amount of wealth that’s usually required to work with a financial advisor.
The minimal amount of education needed to adequately oversee wealth management is both an obligation and a privilege. Otherwise, as women, we become victims of a male dominated industry by using as an excuse that it doesn’t engage us in the way we would like. As a woman, I ask, “So what?” Let’s get on with this business of wealth management that has evolved toward us, from a time when women could not even vote or own property! What an honor and a privilege it is to create and lead our wealth; we can ask the women of only fifty years ago to confirm this truth.
Inequality around money is not something that I don’t understand, especially as a Boomer woman. This is part of the driving force that led me to launch FinancialWoman.com many years ago, although a bit early to the party. As an investor, I have sat across the table from financial advisors who clearly did not make as much eye contact with me as they did with the male present in the room. I’ve been in many social conversations where all eye contact with me was abruptly ended when the discussion turned to investing. It’s frustrating, especially for someone who loves the topic of investing, but it isn’t an excuse for neglecting my money. And in complete transparency, I have certainly been neglectful at times, like most everyone has, but not due to lack of knowledge as much as issues of confidence, and more so, worthiness. This is another, often needed conversation for women around wealth.
It’s true that there is a huge opportunity now for both women and those who serve them in the financial services industry. Times are a’ changing, as they say. Let’s look at some totally awesome recent facts around women and wealth that point to the fact that this change is timely.
According to the Bank of Montreal’s Wealth Institute Study, more than half the wealth in the U.S., or $14 trillion, is controlled by women and this is projected to increase to $22 trillion by 2020.
Women will inherit 70% of the wealth that gets passed during the next two generations, and they already own over half of U.S. investable assets according to the Boston College’s Center on Wealth and Philanthropy in 2009.
This wealth transference is huge! Some of us women launch and run companies. Others of us are C level execs, politicians and doctors. Many of us are mothers, and shaping lives. Leading your wealth with confidence through knowledge and skill is a pretty easy task given all the other roles women play with complete capability. Let’s do this, regardless of the services offered through the financial industry, because we know we can, and because having money is quite simply one of the most important.
Financial advisors, get my eBook here to help you bridge the communication gap with female clients. It’s a gift.