Wealth Management: What Female Clients Say They Need to Know

When male advisors fail to tailor their approach to female clients, everyone loses.

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Reviewed by: Michelle Lodge
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Edited by: Michelle Lodge

Here’s a scenario where, sadly, everyone loses: A male financial advisor doesn’t tailor his approach to a female client. Discouraged by the experience, she decides to manage her own finances, and misses out on the upside—or safety—a trained professional may have otherwise provided. She’s jaded and the industry misses out on new business. 

Perhaps a different scenario develops: The industry shifts gears and acknowledges the reality that women are on their way to controlling a larger slice of the nation’s wealth. Estimates vary, with at least one study from a few years back saying women control just over half of U.S. wealth, and the portion is growing.  

“Some large U.S. wealth management firms have modified their internal process to identify suitable financial advisors for women investors,” Nilesh Vaidya, executive vice president and global industry head of banking, Capgemini, told eft.com.  

He said that Bank of America’s Merrill Lynch wealth management business recently launched a similar capability with its MATCH product, which Merrill calls a “personalized way to choose a financial advisor” on its website. 

What’s more, a personalized approach to female clients means that financial advisors can familiarize them with a range of suitable investment vehicles. “Life-scenario-based guidance will help ETF investor segments improve ETF adoption with sophisticated investment strategies, asset classes like FX, alts and targeted country-specific international investments,” added Vaidya. 

So how do you approach life-scenario-based guidance? John Hancock Investment Management has come up with eight “events” in a woman’s life, through its "Women, Wealth and Wisdom” program.  

They are:  

  • First-time homebuyer: Help them determine their debt-to-income ratio, by totaling monthly bills and dividing them by their gross monthly income (before taxes). Check if they qualify for grants and low-interest loans for housing.  
  • Business owner: Discuss their goals and help them save and invest in a way that protects them, the business and loved ones. 
  • Newly widowed: Among the many things that must be done, suggest they locate the will immediately and cover family expenses that come up right away.  
  • Newly divorced: Encourage them to review their finances, tax picture and retirement, estate and insurance planning. 
  • Caring for aging parents: Guide them through a range of housing, caretaking and health care options. 
  • Nearing retirement: Encourage them to update their financial checklist, bolster savings and review health care coverage and costs. 
  • Estate planning: Discuss family dynamics, trust funds, separation agreements and foreign assets, and selecting and preparing to meet with your estate attorney. 
  • Strategic philanthropy: Help them identify charities in line with their values. 

Good advice at a time when, according to a recent Capgemini study, “women are creating wealth faster than any time in history,” and are poised to gain even more thanks to longer life spans causing them to benefit from wealth transfers. 

 

Follow Michelle Lodge on Twitter @lodgemich  

Michelle Lodge is a journalist who is a contributor to many sites: Fortune, Money, Time, Barron’s, Investopedia, CNBC.com and Bloomberg.com.