How Financial Advisors Should Engage With Female Clientele?
The role of women in this world is changing and many choose to be still unaware of it. In 2021, the United Nations Women announced the International Women’s Day theme as 'Women in leadership: Achieving an equal future in a COVID-19 world' in order to applaud the tremendous efforts of women around the world for preparing a more equal future for women in the midst of the Covid-19 pandemic. However, it was also meant to drive attention to the areas where a gap still remains and more work still needs to be done.
Only in the past 25 years have we seen some positive changes in people’s perspectives regarding the roles of women in society. However, as displayed in the UN Secretary-General's report from the previous year, women still remain underrepresented in government roles, the public sector, civil services, the media, and the health sector. Unfortunately, the same gender bias exists in the wealth management industry as well and this needs to change.
The Power Of Female Clients
Although the male-dominated mindset cannot be changed overnight, one can expect to bring change by coming to the realization that women no longer take the back seat in any sector. In the last decade, women’s wealth has increased drastically.
According to Boston Consulting Group (BCG) as of now, women now control over 32% of global wealth and that number is only expected to rise. For Canada alone, the expected is 50% of accumulated wealth by 2026. Holding such a large portion of the world's wealth, it would be naive to ignore the significance of women’s role in the financial industry.
In addition, studies show that 90% of women will at some point be the sole decision-maker of their finances at some point in their life. This goes to show how important it is that you as financial advisors need to develop attitudes and strategies that accommodate the female gender.
What Women Want
In order to facilitate female clients, you need to first understand their needs and preferences, which in many ways differ from men drastically. As women take more control of their finances, what they require from their financial advisors becomes clearer to them too.
It is essential you learn to communicate and connect with them in a manner that makes them comfortable about discussing their financial concerns with you. However, your dealing with female clients will be much different from that of men. Even science has proven that women and men think differently.
A finding of new research involving more than 50,000 participants in 97 samples, published in the journal Proceedings of the National Academy of Sciences of the United States of America (PNAS) says that men are more likely to make extreme choices than women.
Women, however, tend to worry more about long-term financial security as compared to immediate returns and prosperity. As primary caregivers, women worry more about maintaining an income steady enough to support the essential needs of their families as compared to men who tend to define success by a number they have achieved. This goes true for whether the female is the sole bread earner or a contributor to the family income.
Their desire to leave a legacy for their family comes from their feministic instinct to protect and support their loved ones. Therefore, when it comes to investing, women tend to be more “smart and cautious” investors. They tend to ask more questions in hopes of better understanding the short and long-term impact of their investments.
Katie Nixon, Chief Investment Officer of Northern Trust Bank, explains that women are more likely to question and discuss investments in order to have all they need to make decisions. She says, “Women base their investment decisions on facts, not on instinct.”
When it comes to dealing with women, it is essential that you are sensitive to their demands and needs and see their financial concerns from a woman's perspective. Failure to receive such empathy may result in an unsatisfied female client who abandons their advisor.
Building A Relationship With Female Clients
Since women expect a different experience from financial advisors than men, you are required to devise a strategy that is tailored to suit the unique needs of women and their concerns. Whether your client is a woman who is single, married, divorced, or otherwise, how you interact and communicate will be a testament to your commitment to serving the female gender as per their needs.
Educate Your Female Client
Understand that most women tend to be unfamiliar with the jargon of the financial world. Have the patience to educate and familiarize them with the financial terminology. Women have become accustomed to facing gender bias in most aspects of their social, professional, and even personal lives, thus making an attempt to show empathy in a manner that assures them that their concerns, much different from men, are understood and taken seriously.
Be Better Prepared
Be ready to be challenged as women tend to inquire more about the topic in order to gain assurances that the decision they are making is in fact the best one. They don’t assume to be know-it-alls. This requires you to be better prepared to answer in-depth questions about how the world of finances works.
Building Trust And Loyalty
Managing money can be a highly emotional process for a woman and they don’t tend to trust easily. Whether it may be due to unfair treatment in the past or due to the fear of delving into a strange and unfamiliar world, they will require some extra upfront efforts to gain trust. However, once that trust is gained, females will stay loyal clients and maintain a long-term advisor-client relationship. So try to build that trust with honest and serious communication.
Targeting The Female Demographic
Females now make up almost 50% of the world population. In this constantly changing competitive world, where women are becoming more economically independent and financially aware, the wealth management industry needs to pay more attention to its female clients. That includes when developing marketing strategies.
Have you taken into consideration targeting the female demographic and promising to cater to their unique financial needs? Make sure your marketing targets the financial concerns faced by single mothers, widows, or divorcees. Understand that women face many different financial restraints than men.
Have your social media marketing campaign specifically target women by joining groups and communities where you can connect with women with financial concerns. Make sure your infographics contain visuals of females and appeal to women. Have your banner ads clearly say things such as “Women and Wealth: Investing In Women’s Dreams.”
Create and share blogs, articles, white papers, and ebooks that share information regarding the female status in today’s world and how you aim to provide assistance to women with wealth concerns. Make sure to design your prospecting process and script that attracts female clients.
It is time financial advisors review their strategy when it comes to dealing with female clients. As you spend more time with your female clientele, try to nurture your bond and make it strong enough to build a long-term relationship. Money can be an emotional topic for women. For them acquiring wealth comes with a sense of stability not only on the financial level but also emotionally as well.
For female clients, the meaning of wealth acquisition, investment, and retirement differ from men’s. Women tend to take breaks in their careers for caregiving, have higher medical expenses, and live longer yet are expected to retire early. As an advisor, you need to communicate in a manner so that you can reach their emotional understanding. As being the more “loyal” gender, try to service your female clients in a manner that results in a promising long-term client relationship.
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