Advisers unsure how to reach women

The financial advice business might be a man’s world, but it is women and their needs that will increasingly drive its economics.

An InvestmentNews survey of 439 male and female financial advisers showed that both men and women understand that. More than 81% of male respondents and more than 83% of female respondents said their firms are actively seeking more female clients.

They should be. The economic and demographic trends are clear. Women now make up 51% of the population and nearly two-thirds of the workforce. Sixty percent of college students are female and women represent large and growing proportions of the legal, medical and accounting professions. Women control $14 trillion of personal wealth in the U.S., and it is estimated that the amount will rise to $22 trillion by 2020.

“The interest in serving women from a financial planning perspective is driven primarily by the awareness that they have a lot of money and are an important market to pursue,” said Eleanor Blayney, consumer advocate for the Certified Financial Planner Board of Standards Inc. and president of Directions for Women, a consulting firm.

Of 219 male advisers surveyed by InvestmentNews, 41% said that women represent more than half of their clients, versus 52% of the 179 female advisers who answered the question. There are significantly more women with high percentages of female clients; 11.8% said women represent more than 80% of their clients, compared with 3.7% of the male advisers.

The biggest obstacle to attracting more female clients is failing to understand how to market to them. Of the survey respondents, 36.6% cited that as a problem.

(Read the full InvestmentNews Women & Investing special report.)

Ora Citron, an adviser with Oak Tree Wealth Management in Alamo, Calif., said she has created separate brochures and drafted distinct discussion strategies for women recently divorced or widowed.

“Our program takes account of the emotional trauma they’ve experienced,” she said.

She said working with female clients came naturally to her. “I wasn’t focused on women per se when I started in financial planning three years ago, but it was obvious to me as I started that women discounted themselves and shied away from knowing things they needed to know about their financial lives,” Ms. Citron said.

While advisers caution against stereotyping women and what they want from their financial advisers, in general, female clients tend to look for a deeper relationship with their adviser. They are less concerned with investment track records and more with whether an adviser understands their life goals and financial needs, and whether they can trust the adviser.

COMFORT FACTOR

It stands to reason that women would be better prepared to meet those needs. However, both male and female advisers said they are more comfortable working with women than with men.

When asked how comfortable they are working with male and female clients on a scale of 1 to 6, with 6 being the most comfortable, male advisers rated working with women an average of 5.28, compared with 4.97 for working with men.

The female advisers had an average rating of 5.51 for female clients and 4.88 for males. Both male and female advisers feel least comfortable with newly divorced men — with ratings of 4.24 and 4.09, respectively.

“It takes longer to form a relationship with a woman and to have them trust you, but once they’re in the door, they’re great clients,” said Alyssa Moeder, a New York-based adviser in the private-banking division of Merrill Lynch Wealth Management. “When they do trust you, they are very loyal and they’ll recommend you to their friends.”

WOMEN IN TRANSITION

Ms. Moeder serves a range of ultrahigh-net-worth and family office clients but has created a specialty in her practice dealing with women in transition — usually after the death of a spouse or divorce. She said advisers have to be careful with women in vulnerable situations.

“Whether they’ve been divorced or widowed or have had a health problem, dealing with financial stuff is typically the last thing they want to do,” she said. “Before I start investing for them, I want to understand what their needs will be. Often they don’t know, and you have to work with them on it. Unless they’re fully invested and need to make changes, I take it slow.”

It is not a given that men lack the empathy or communication skills to succeed in building relationships with women. For Michael Fleming, an adviser with Halliday Financial Group Inc. of Albany, N.Y., which manages about $40 million in assets, it’s mainly a matter of making the effort. He said that between 60% and 70% of his clients are women.

“If I’m working with a married couple, I focus on the woman because I think they need to be engaged in the financial planning discussion,” Mr. Fleming said. He said connecting with the wife is key to winning over married couples.

“In a first meeting with a couple, the husband usually takes the lead in the conversation, but if the wife doesn’t like you, you probably won’t get the client,” he said.

HELP WANTED

The second-biggest obstacle to attracting female clients — cited by 23% of responding advisers — is a lack of female advisers in their firm.

In follow-up questions, 51% of the advisers said their firms are recruiting or plan to recruit more female advisers. However, neither men nor women believe that advisory relationships should be segregated based on gender. Only 25% of respondents said that new female financial advisers should serve primarily female clients.

“There are so few female financial advisers,” said Deeann Griebel, a Mesa, Ariz.-based adviser managing more than $325 million for Wells Fargo Advisors LLC. “The industry has tried mightily to recruit more women, but it’s a problem.”

Ms. Griebel said she was hired by Thomas McKinnon Inc. in 1983 “to make quota.”

One problem may be the training programs in large firms, Ms. Griebel said. They measure success by the ability to attract assets and open new accounts. Women may tend to tread more cautiously with clients as they learn the business, and that can hurt them in terms of signing up new clients. Ms. Griebel said it took about four years for her practice to take off — a length of time that many firms won’t give their trainees.

“My sense is that women are often more worried about the ramifications of their recommendations,” Ms. Griebel said. “Men say, “Do this,’ while women may sometimes be too cautious to tell customers what they need to do.”

[email protected]