If your wealth management firm automatically steers all female investors who come in the door to a woman advisor in the hopes of capturing a larger portion of women’s $72 trillion wealth—you’re doing it wrong.
We understand your motivation. Women hold 32% of wealth globally, outlive male investors and have been vastly underserved by the advisory industry. In fact, the wealth industry is estimated to miss about $700 billion in women’s investments a year precisely because it fails to address the needs of women investors, according to the global consulting firm Oliver Wyman.
Another quick way to lose a wealthy woman’s business is by assuming she wants to work with another woman without asking her. “Women are often insulted when they feel they are being pushed to a female advisor,” says a new study from the Spectrem Group entitled, “Preferred Sales Approach: Capturing the Wealthy Investor.”
“It’s never been a fact that women investors want women advisors,” says George H. Walper Jr., Spectrem’s president. “The industry is perpetuating the myth that women come in the door asking for women advisors, and all the research in the past 20 years demonstrates it’s not true.
“Women want the advisor who is an expert and prefer advisors who use a financial planning model and appear to be ethical,” he says. “But they don’t walk in the door asking for a woman. To say otherwise is like saying millennials only want to work with millennial advisors, and we know that’s not true.”
Spectrem’s latest research found that 89% of women and 88% of men don’t care about the gender of their financial advisor. “In fact, investors are more likely to care about the political affiliation of their advisor (31%) than their gender,” the firm said in a research summary.
As a female investor told Spectrem researchers: “I walked into a firm and they told me to make myself comfortable in the waiting room. Stephanie is the person who would be best for me and she was still at lunch. I couldn’t figure out how they would know Stephanie was the best for me. They only knew that I was a female and nothing else. They were all twentysomething males.”
When it comes to clients being matched to advisors, Spectrem advises: “Just let the investor decide. Regardless of whether the investor is male or female, investors really just want the smartest person in the room to be responsible for their investments.”
The findings don’t shock Carol Fabbri, who founded Fair Advisors in Conifer, Colo., after working as a Merrill Lynch rep for several years. “I absolutely understand why a woman being pushed toward a female advisor would be insulted. Each client and prospect should be directed toward an advisor that specializes in their needs, experiences and/or industry so they can offer specialized value,” says Fabbri, who received her M.B.A. from the Massachusetts Institute of Technology.
“Ovaries are not a relevant commonality,” she adds. “The 166 million women in the U.S. do not all think in one way or have the same needs and cannot be considered a niche or a specialization. If I were directed toward a female advisor for no reason other than our gender, I would walk out of the advisory practice immediately.”