More women are taking control of their finances and wealth managers are doing a better job marketing their services to them. But many financial advisors are still inept at helping women who are clients because they haven’t evolved the advice they give, according to a report by Swiss bank and wealth manager UBS.
Years of research shows that what is most important to women investors, and how they want to interact with an advisor, is different compared to men, said Marianna Mamou, who oversees thought leadership on holistic investment advice and financial planning at UBS’ chief investment office.
Companies need “to go further than just a marketing approach, or just the financial confidence efforts and education.” Those are “very important steps, but it needs more than that,” Mamou told RIA Intel.
Advisors who don’t recognize that and make changes are doing a disservice to women and committing a business oversight. Women control more than a third of total U.S. household assets and their portion is expected to grow throughout the coming generational wealth transfer. In recent years, financial service firms have made a concerted effort to retain and attract more women investors and diversify their workforces so women are more likely to become clients. Still, many women investors remain skeptical of advisors.
Conversations between men and wealth managers tend to focus more on financial markets and investment performance. The jargon that comes with those topics can be off-putting and women care more about their likelihood of achieving their goals in the near-, middle- and long-term, Mamou said.
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To better serve women investors, UBS recommends that advisors focus more on women’s financial goals, develop portfolios centered on those goals, and help women feel more confident about investing and understanding the relationship between risk and return. Like past reports, UBS’ latest annual report focused on women also showed they tend to care more about their investments reflecting their values and their impact on society.
“What they are looking for is advice,” Mamou said. “‘This is my financial situation. I would like to retire. I would like my kids to have a good education. I’d like to meet like any healthcare needs that I will have in the future, and how will the product, or say the offering that you have, help me with these objectives?’”
Research shows those conversations are not happening enough. Seventy percent of women change financial advisors within a year after the death of their spouse, according to a McKinsey report published in 2020. Satisfaction remains lows among women who do use financial advisors — 67 percent of female investors believing their wealth managers misunderstood their financial goals, according to EY.
“There is the mismatch in terms of what advice [women] receive and what advice they’re looking for,” Mamou said.
Advisors must consider the holistic needs of women, but wealth management firms also need to hire more women and diverse candidates, said Saira Shariff, a managing director in Accenture’s North America Wealth Management practice.
Research by Cerulli Associates indicates that there is some correlation between the advisor talent pool and the gender makeup of their clients. In the report published last year, Cerulli analysts found that for the majority of women advisors, more than half of their primary client contacts are women compared to only one-third of men. “Firms can better serve clients if their advisorforce [sic] more accurately reflects the diversity in end-investor markets,” Marina Shtyrkov, senior analyst at Cerulli, wrote in the report.
Ocoee, Florida-based AMES Financial Solutions is an example of that success.
After more than a decade working as a financial planner at Charles Schwab, serving mostly men, Reshell Smith started AMES Financial Solutions in 2013 to focus on serving people like herself — Black, female, educated and interested in investing. Out of more than 100 clients, 99 percent are Black or Brown women and most are high-income earners, Smith said.
Clients are finding Smith because they can relate to her. “I can’t be like my Caucasian cohorts. I’m not going to wear a blue suit and tie, and I’m probably not going to use words that they don’t understand,” Smith said.
Smith’s advice to other advisors looking to reach more women is to simply go where they are and to be authentic. She goes places — to church, to games and events at historically Black colleges and universities, and to women empowerment groups and summits — where she knows there are wealthy Black women. When she meets potential clients, they often say they’ve been looking for an advisor like Smith but didn’t know where to find one.
If advisors, interested in having more women as clients, are on the golf course or going fishing, “obviously, you’re not going to really see them,” Smith said.
Holly Deaton (@HollyLDeaton) is a staff writer at RIA Intel and based in New York City.