Women Seeking Financial Advice Creates Opportunity For New Clients

Financial advisors looking for new clients should perhaps take a cue from Wall Street's "Fearless Girl" statue. It depicts a plucky girl, hands on hips, bravely facing down a snorting, ready-to-spring bull.

The statue stands outside the New York Stock Exchange, and is perhaps emblematic of women's rising stature on Wall Street. Sources say $22 trillion in assets will shift to women by 2020.

Surveys show a potential wealth of opportunities in this area, yet not all advisors may be set to capitalize. The winners will likely be those who grasp and address women's views on money.

Prospects appear red-hot. According to a Fidelity Investments study released in November, 72% of women across all ages plan "to take steps within the next six months to make their money work harder and grow."

Aims cited in the report include: interest in creating a financial plan; investing savings (the report says 56% of women currently don't invest any savings outside of retirement accounts and emergency funds); selecting investments suited to their goals; and seeking help from a financial professional.

Clearly, women are on a quest for information. Women & Financial Wellness, a report Merrill Lynch (in partnership with Age Wave) published last April, had drawn 70,000 site views and almost 837 million media impressions by early December. It's one of Merrill Lynch's most popular reports in recent times, notes Jen Auerbach, the firm's head of strategic growth.

'Massive' Opportunity For Advisors

This trend among women is a "massive, if not the biggest, opportunity advisors have," said Kirstin Hill, managing director and strategic performance executive at Merrill Lynch.

But however juicy the development seems, it may not beckon all advisors. "There has been an improvement over the past several years in advisors' readiness to meet the needs of women and families," said Kathleen Burns Kingsbury, a wealth psychology expert and author of "How to Give Financial Advice to Women." "But there's still a ways to go."

Kingsbury sees three tiers of advisors. One tier are those who "know that reaching the 51% of the population that are women makes good business sense. And they are tailoring their services to be gender-savvy." Another group — roughly one-third of advisors — are willing "to try to address" women's financial needs but aren't sure they differ from men's.

And the remaining one-third apparently aren't reaching out: "They believe women aren't interested in finances," Kingsbury explained.

Generally, the savviest advisors when it comes to women tend to be female and younger advisors, she suggests. Beyond transactions and returns, they're likely see the bigger picture. That includes addressing such issues as a client's generation — "whether she's a breadwinner and has family members to support."

As Randy Kaufman, a senior vice president at EMM Wealth, sums it up, many women see money and investing as a means to achieving their life's goals.

So how can advisors exhibit or expand their grasp of women's financial needs and attract them as clients?

Experts Suggest These Steps

• Create what Fidelity calls a "welcoming environment" for clients. At Fidelity, this ranges from providing gender and racial diversity among the firm's advisors, to "humanizing the conversation" with clients, says Lorna Kapusta, Fidelity's vice president, women investors. In the latter case, advisors are urged to avoid financial jargon and explain concepts in a clear, understandable way.
• Take into account clients' differing views and situations. As part of its October investor tracking study, for instance, E-Trade found that 32% of single women were confident they are making the right decisions about their portfolios, vs. 51% of married women.
• Inquire about the client's interest in socially responsible investing. This strategy appeals to many women since it allows them to invest in a way that supports their values, says Amit Chopra, owner of Forefront Wealth Planning and Asset Management.
• Suggest creating a CD/bond ladder to avoid running out of money in old age. Michelle Morris, owner of BRIO Financial Planning, suggests this 10-year laddering process from the Alliance of Comprehensive Planners for those in or near retirement. Buy CDs maturing in years 1 through 5, and stripped Treasury securities coming due in years 6 through 10. When an issue matures, take cash from it if you need the money. If not, reinvest the funds at the far end of the ladder.
• Raise the issue of estate planning, including the need for a health proxy, a designated power of attorney and an up-to-date will. These "essential" parts of financial planning have "often been overlooked, especially among women who are single and/or mothers," says advisor Michelle Adler, of Citi Personal Wealth Management.

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