Advisors Slow To Change
But changing an approach can be difficult, and tailoring communication styles to different types of clients is no small challenge. Some 70% of widows change advisors within the first year of their spouse's death, for a simple reason: The advisor got used to talking to the man in the couple about just investment performance.
"If you look at CNBC, it looks like ESPN," Ettinger said. "Women are much happier focusing on how they are doing versus their goal rather than versus a benchmark."
"When the husband dies, the advisor calls up the widow and starts talking about investment performance, and what to buy and sell. And she's saying, 'Wait; am I going to be OK?" Ettinger said. "'I thought that was your job to figure out what I'm supposed to be in based on my goals. I don't want to get into that detail. I want to know that you're taking care of me.'"
The advisor has to understand what's unique about that client and her situation, and adjust his approach. As Dzanis put it, "The financial advisor has got to learn to flex their style."
Tips courtesy of Marie Dzanis, senior VP and head of intermediary sales for Northern Trust
Women Are More Cost-Sensitive Than Men
Women are generally more aware of fees, but not all of them. And that sensitivity to price tags doesn't apply to financial advice as much as it does to products.
"The most fee sensitivity I see is among divorcees and widows," Ettinger said. "The breadwinners that have more assets are actually less fee-sensitive, but they're more willing to pay for advice than investment product."
That focus on product pricing is why ETFs are hugely popular with women, and in Ettinger's practice, a widely used vehicle. Low-cost models appeal to women investors. ETFs are also transparent, and easy to use—all traits that resonate with women.
All of that matters, but to advisors, the pressure to have a value proposition is real, if not increasing, in the face of the proliferation of low-cost platforms such as robo advisors. Fee sensitivity seems to be on the rise.
"If you want to be successful in this business, you've got to be moving toward the advice side and understanding what client you want to serve and what's going to be your unique value proposition in serving that client base," Ettinger noted. "Segmentation is critical to success."
Contact Cinthia Murphy at [email protected].