What Women Investors Want From Advisors

August 06, 2015

A segmented look, she says, will show that a lot of women who are going through a transition—say, getting a divorce or recently becoming widowed—are suddenly having to control money at a time that's not only emotional, but already busy to begin with.

Their attitude toward investing might be different from that of other women.

What's common among women—including breadwinners who lead decision-making when it comes to money—is that they generally have little time to think about investing.

"What's happening is that the default is a more conservative allocation than they probably should have," Ettinger said. "It's not that they're intentionally saying 'I want to be more conservative,' it's that they don't have an advisor who's coming in and redoing their 401(k) plan, saying, 'It's likely you're going to live to 90 and you need to have a more aggressive allocation.'"

Women, as a group, might not necessarily be more risk averse than men, but they're less likely to trade regularly or tinker with their investments. They are less likely to make random bets. That, too, is directly linked to the fact that women have to juggle multiple priorities in the family.

Women are more likely to ask for help from an advisor than men are.
Indeed, research shows that women are far more likely to seek help with their investing needs than men. They're also better at asking questions, and they're more vocal about what they don't know.

To advisors, the importance of this reality is that when they're dealing with a couple, they need to make sure to address both parties in that couple, Johnston-Ketterer says. Consider that some 80% of men die married, and 80% of women die single or widowed. Chances are if the advisor is working with a couple, he or she might at some point have to work with the woman alone.

Where The Trouble Starts
That's when the troubled relationship between women and advisors surfaces. Today nearly 70% of women say they don't trust the financial services industry; 35% of women breadwinners don't have financial advisors; and about a third of these women who earn at least 50% of the family income say they don't have an advisor that does comprehensive financial planning, according to data Ettinger uncovered.

Most women change advisors when a spouse dies.
Women are more likely to seek help, but that doesn't mean that they're finding it.

"They like somebody who can be kind of a quarterback and help them with financial planning and tax planning and charitable gift planning, estate planning—all those different aspects rather than just investments," Ettinger said.

Women want to preserve their lifestyle more than they care to beat a benchmark.
Women look at investing completely differently than men? Oh, so true.

In financial circles, numbers are king. Advisors often like to focus on performance data—look at how great this portfolio is doing relative to the broader market. But that message doesn't resonate with women clients in general.

Source: Market Strategies International

Women relate better to stories. They like anecdotes far more than performance statistics, Marie Dzanis, head of inter-mediary sales for Northern Trust, and someone who spends a lot of time educating advisors on gender issues, told us.

"Women tend to see investing in terms of lifestyle. Men tend to think of it in terms of winning," Dzanis said. To her, when dealing with a couple, it might even make sense to interview the clients separately to get a better picture of what each wants to get out of their investments.

Getting that message right matters, because more than 50% of stock ownership today and 85% of consumer purchases are controlled by women, Dzanis says. These are just some of the numbers that point to the growing footprint women have on the investing landscape.


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