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What Makes Women Choose A Financial Advisor

What Makes Women Choose A Financial Advisor

May 24, 2016

by Dan Solin

Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.

Women are an important demographic for investment advisors. According to a 2014 study prepared by Ameriprise Financial, which included more than 2,000 women ranging in age from 25 to 70, almost every American woman surveyed either influences financial decisions or makes them on her own.

Moreover, there are three times as many women earning college degrees now than in 1970. Approximately 71% of mothers with children under 18 are employed.

Selling to prospects who are women requires a fundamentally different mindset than when working with men. Here’s what advisors need to know.

Woman power

By some estimates, in the next five years, private wealth is expected to grow from $14 trillion to $22 trillion. Women will control as much as two-thirds of those funds.

Unless you are successful in attracting women as clients (whether they come to you on their own or with their spouse or partner), your ability to increase your assets under management will be seriously impaired.

I previously wrote about this subject, and provided support for my views.

Communication issues

The core problem arises from the fact that men and women communicate very differently. Their expectations from communication also are very different. Richard Drobnick, a practicing counselor and psychotherapist, summarized these differences in this blog.

Drobnick noted that men hear communication through a problem-solving filter. When something is expressed to them, men want to “fix” it. Women are also excellent problem solvers, but they may not always simply be looking for solutions. He observed that women use communication to explore and organize thoughts or ideas. Sometimes, they just want to be heard and understood.

This is a critical difference, which I discussed in this article about empathy.

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What Makes Women Choose A Financial Advisor

Financial Advisor