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Among the myriad data points advisors regularly encounter is the estimate that by 2030, women are expected to control $34 trillion in wealth.
Smart advisors see that as opportunity because 2030 isn’t that far into the future and that $34 trillion will increase with each passing year. Astute advisors also know that while women are looking to improve their financial education foundations and are highly open to working with advisors, those factors cannot be taken for granted.
Success in terms of converting female prospects to clients is realized through a variety of factors, including acknowledgement that women are more vulnerable to wage gaps, family-care gaps, and retirement gaps as well as knowing that while women want to build wealth, their goals upon obtaining wealth or financial comfort often differ from those of their male counterparts.
Addressing those issues requires a proactive posture, customized strategies and knowing that, in some cases, demographic considerations matter.
Customization, Demographics Matter
A recent Cerulli Associates study indicates just 18% of advisors are women. By comparison, 39% of U.S. business owners are female. Obviously, some practices are small by design, but if principals have the ability to bring aboard new advisors, serious consideration should be given to female candidates because women like working with other women when it comes to their money.
“In line with the advisors we surveyed, we also would like to see more women consider careers in the financial services industry that can then have a multiplier effect by 1) attracting more female advisors and 2) attracting more female clients to the industry,” notes Goldman Sachs Asset Management (GSAM). “We found that 85% of surveyed advisors believed that more female financial advisors in the financial industry would empower more female investors.”
There are clear reasons why practices should consider hiring more female advisors, not the least of which include it’s just smart business and the fact that the industry is grappling with a shortage of replacements for advisors nearing retirement. Add to that, many male advisors don’t see differences between the financial endgames of male and female clients – a surefire way to close women’s business.
“Female advisors' understanding of these experiences can enhance the quality of their services and relationships with female clients,” adds GSAM. “While not all women seek to work exclusively with female advisors, those who do may appreciate the shared experiences and perspectives on managing families, careers, and caregiving responsibilities.”
How to Make an Impact with Female Clients
As noted above, a lot of women would prefer to work with female advisors, but that doesn’t mean they’re entirely adverse to working with men. It does, however, imply that male advisors had better recognize the one-size-fits-all isn’t going to cut it with women and that this demographic faces different challenges than do men.
As GSAM observes, women want to preserve wealth in the name of enhancing the world around them and so they can bestow something tangible to heirs and favored causes and charities.
“A growing number of women will seek financial guidance and advice, activating structural changes within the traditionally male-dominated investor base,” concludes GSAM. “We see a growing commitment among advisors to help women achieve their financial goals and advisors unanimously agree on the need for more female financial advisors. The wealth management industry is at the precipice of change. We see an evolving business and we expect continued evolution around customization, product-type, and client service as the industry adapts to change.”