In the traditional financial services sector, women have been categorically ignored. Advertising speaks to the men, with insurance spots telling men how to provide for their families and brokerage ads showing off their cool tools and apps. Women remain an underserved group of investors. If you are a smart advisor, though, you will embrace female clients, as they are the main money managers in most families. They also outlive their male counterparts, on average, and have longer investment horizons. But how does managing women investors differ from serving men?

Women in Finance
In 2010, CAIM LLC surveyed over 500 American women for their study, entitled What Women Want: Understanding The Modern Female Investor. The study recognized that women in North America directly control 33% of all wealth on the continent and influence much of the rest. Women are also more likely than men to seek financial advice. Women in lower income households reported that they were more concerned with basic financial products, such as insurance and college savings, whereas higher-wealth respondents sought more help with retirement planning and with boosting investment returns.

Even with this significant amount of wealth to control, women still represent a small proportion of investment clients in many financial services practices. Women often feel intimidated by financial planning. The CAIM study quotes from other research suggesting that over 70% of the women who do seek out financial advice are unhappy with their advisors and the advice they are given.

What Women Are Looking for
omen want exactly what men want in an advisor. They want to be given options, they want to have all of the information they need to make investment decisions and they want to feel like a partner in their financial planning. Yet many advisors treat women differently than men. They tell female clients what they need, expect them to trust the advisor's advice without question and they are dismissive of client concerns and needs.

The study concludes that women are seeking an ongoing relationship with their advisor, and they want someone who will take the time to listen to them and teach them financial skills. An advisor who takes the opportunity to do this can build their clientele around the financial needs of women. As women generally communicate better and more frequently than men, an enlightened advisor is likely to attract new female clients as their book of business grows.

Does this mean that you have to hire women advisors in your practice? Not necessarily. Consider female clients' needs for information and education. Hold investment education seminars. Start an investment blog in which you write about basic financial planning issues. Most importantly, don't make assumptions about clients' investment knowledge based on the amount of wealth they are managing. Cultivate your relationship with your female clients and be approachable when they have questions throughout the year. The more they know the more products they may be interested in.

The Bottom Line
Women's wealth is increasing and, as life expectancies rise, so too does their need for a solid financial plan. Savvy advisors will position themselves to meet this underserved market. Women want financial advisors who will work with them to preserve and build their wealth and plan for the future. The market is increasing while women's satisfaction with their current advisors and the advice they're getting is decreasing. Helping women understand financial products and strategies by educating them and listening to their concerns and needs is the best way to position your business in this burgeoning market.

Related Articles
  1. Investing Basics

    5 Things To Ask Before Hiring A Financial Advisor

    Choosing a financial advisor isn't an easy task. Here's a list of the most important things to consider when planning for your financial future.
  2. Personal Finance

    How To Choose A Financial Advisor

    Many advisors display similar skillsets that can make distinguishing between them difficult. The following guidelines can help you better understand their qualifications and services.
  3. Professionals

    The Best Schools for Financial Planning

    Among the best universities for financial planning are the University of Georgia, Boston University, The College of Financial Planning, Texas Tech, San Diego State, Baylor, Fairleigh Dickinson ...
  4. Retirement

    How to Choose 401(k) Investment Options

    401(k) plans have become an integral part of retirement planning for good reason.
  5. Investing

    Oprah Winfrey Biography

    Oprah Gail Winfrey is an American media magnate, television and film producer, and talk show host with a net worth of roughly $3 billion.
  6. Professionals

    How Brokers are Candy-Coating Alternatives

    Alternatives have become a sexy choice for many advisors. But they also come with additional risks that are not always clearly spelled out to clients.
  7. Professionals

    Advisors: Clients Want These Three Things from You

    Calmness, transparency and credentials (and more) are the key elements clients look for when selecting a financial advisor.
  8. Investing Basics

    6 Investing Mistakes That the Ultra Wealthy Don't Make

    Understand what ultra-high-net-worth individuals are and how they invest. Learn about the six key investment mistakes that the ultra wealthy avoid.
  9. Professionals

    Dodging the Dangers of Self-Directed IRAs

    Self-directed IRAs are an attractive option for investors looking to build nest eggs. But they should exercise caution in avoiding prohibited transactions.
  10. Professionals

    Using Tax-Loss Harvesting to Keep Your Gains

    Harvesting tax losses is a key skill that investors can use to keep more of their money in their pockets the next time they file taxes.
  1. Do financial advisors get paid by mutual funds?

    Financial advisors are reimbursed by mutual funds in exchange for the investment and financial advice they provide. A financial ... Read Full Answer >>
  2. Do financial advisors prepare tax returns for clients?

    Financial advisors engage in a wide variety of financial areas, including tax return preparation and tax planning for their ... Read Full Answer >>
  3. Is a financial advisor required to have a degree?

    Financial advisors are not required to have university degrees. However, they are required to pass certain exams administered ... Read Full Answer >>
  4. What fees do financial advisors charge?

    Financial advisors who operate as fee-only planners charge a percentage, usually 1 to 2%, of a client's net assets. For a ... Read Full Answer >>
  5. Under what circumstances would I benefit from a high net worth insurance policy?

    A high-net-worth insurance policy is specifically tailored to suit the needs of high-net-worth individuals. It is specifically ... Read Full Answer >>
  6. Under what circumstances would I require private wealth management?

    An investor who is a high-net-worth individual (HNWI) may require private wealth management services. HNWIs have unique financial ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
  2. Revenue

    The amount of money that a company actually receives during a specific period, including discounts and deductions for returned ...
  3. Normal Profit

    An economic condition occurring when the difference between a firm’s total revenue and total cost is equal to zero.
  4. Operating Cost

    Expenses associated with the maintenance and administration of a business on a day-to-day basis.
  5. Cost Of Funds

    The interest rate paid by financial institutions for the funds that they deploy in their business. The cost of funds is one ...
  6. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!