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Traditionally, financial advisors have focused on affluent men as the primary decision-makers in their households. But not anymore!
There is a growing case for financial advisors focusing on affluent women. Women are becoming increasingly financially independent and are taking control of their own financial futures. Women are earning higher salaries, running businesses, and accumulating more wealth than ever before, making them a key demographic for financial advisors to target.
Women Approach Financial Planning Differently
While men often focus on maximizing returns, women tend to be more focused on ensuring their financial security and that of their loved ones, which can make them more open to seeking professional financial advice and following a long-term, holistic approach to financial planning. Women live longer than men on average, which means that they need to plan for a longer retirement, as well as for taking time out of the workforce to care for children or elderly family members. As a result, they often need to be more proactive in saving for the future and ensuring they have the resources to maintain their standard of living.
Bill… What about referrals?
Great question! I saw one study that demonstrated that women are about 240 percent more likely to participate in the referral process. Also, generally speaking, the narrower you go in a target market, the easier it is to become referable and get unsolicited referrals that are the perfect fit for your practice.
More Risk-Averse?
While we always have to be careful assuming too much about any specific person, the research demonstrates that most women are more risk-averse than men when it comes to investing.
They may be more interested in steady, reliable investments that provide a stable return, rather than high-risk, high-reward options. Don’t assume but be ready.
While there are broad strokes that can be applied to all clients, micro-issues that splinter along gender and demographic lines should not be ignored. A recent Bank of America survey indicates that three issues are high atop the list of priorities for female clients:
- Being debt-free.
- Preparedness for unexpected expenses, and
- Self-sufficiency.
Advisors want to be aware of all three, as these issues can have a significant impact on all aspects of their client’s lives.
By understanding women’s unique financial needs and goals and by providing sound, tailored advice, financial advisors can help women to build and preserve their wealth and secure their financial futures. As women continue to become increasingly financially independent and take control of their own financial planning, the opportunities for financial advisors to work with this demographic will only continue to grow.