Financial services has historically been a male-dominated industry so it may not surprising that women have long complained about not being heard or understood.
As much as 70% of women leave their financial representatives after the death of their husband, according to survey by Kathleen M. Rehl, a financial planner, author and teacher who specializes in helping widows. The study, titled “Widows’ Voices: The Value of Financial Planning,” was published in the January 2016 edition of the Journal of Financial Service Professionals.
But now, thanks to changing demographics, women are getting more attention. Consider this:
- Women, who could inherit money and assets from both parents and spouses, play a critical role in the transfer of family wealth.
- Widows are one of the fastest growing segments of the U.S population. According to the U.S. Census Bureau, more than 1 million women are widowed every year. The average age a wife becomes a widow is 59.4; she may very well live another 15 years on her own.
- Women already control about 51% of personal wealth in the U.S. and that percentage is expected to grow to $22 trillion by 2020, according to the Family Wealth Advisors Council.
Despite these demographics, there aren’t many representatives who are set up to meet the needs of women clients. For one thing, only 32% of financial representatives are women, according to the Federal Bureau of Labor Statistics.
According to a recent study by Ernst & Young, women commonly describe financial representatives as “patronizing,” “unwelcoming” or “full of jargon.” Worldwide, some 67% of female investors say their wealth manager or private banker misunderstands their goals and can’t empathize with their lifestyle.
Some common mistakes and what to do about them
So what can financial professionals do to better understand the needs of female clients? Here are some ways to improve client relationships with women:
Talk to the husband and the wife — If you’re working with a couple, be sure to listen and make an effort to understand the concerns of both parties. Given the statistics of how many women leave their financial representatives after becoming widowed, it seems some representatives focus on cultivating the relationship with the male.
Work to understand a female client’s goals and fears — If you’ve already built a relationship with both the husband and wife, then you’ll understand both their goals and fears. Women have different concerns than men since women, on average, spend more time out of the workforce, make less money when they are working due to gender wage gaps and also live longer lives.
Empower female clients through education — Surveys show that women are interested in financial education and are often not as confident about their financial knowledge. After a woman is widowed, about half said they were not as confident about their finances as they were before their partner’s death, according to one study.
Representatives who lead with holistic advice rather than information about products will go a long way toward fulfilling this need. Trust, while important to everyone, is slightly more important to women investors who place greater trust in representatives who can clearly explain their investment decisions.
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