Financial advisors need to go on the offensive in order to attract female clients, according to Nalika Nanayakkara, principal at EY.
In many cases, widows leave their deceased spouses’ financial advisors to find different advice and support elsewhere, Nanayakkara said.
How advisors will keep those women and draw new ones into the office as clients “is a bigger question than just ‘Why is there a gender gap?’ Executives at RIAs need to go on the offensive and think about the overall picture of how women are treated, especially as clients,” she said.
Women are less focused on transactional advice than men, she said; they want a relationship and want to trust their advisor. And RIAs who don’t have a creative policy for attracting them are missing a great opportunity and leaving money on the table.
Other things RIAs must consider when attracting women are their differences—they all have different ages, needs, personalities and family situations.
Instead of focusing on transactions, “RIAs should consider developing goals-based planning,” Nanayakkara said, “which is more important to women.” Goals-based planning helps advisors develop relationships with their female clients and improves retention, she said.
“I know one female advisor who has developed her practice focusing mostly on widows,” she said. “It took her about five years to develop the niche. Now that is where the referrals come from.” An advisor could also concentrate on the intergenerational transfer of wealth or on entrepreneurs or other groups.
Women do not necessarily want to deal exclusively with female advisors. Because of the changing climate, RIAs are training their male advisors to work better with female clients, Nanayakkara said. “Many women still do not have a will and most do not have a health proxy or a declared power of attorney. Advisors can use these areas to make inroads” into the female market, she said.