Why Women Switch Financial Advisors

It’s no secret that women are more likely to be unhappy with their financial advisors. According to a Bloomberg article data collected over the past few years indicate the marketplace is not meeting the needs of today’s woman regardless of their rising incomes, increased purchasing power, educational and professional advances and the fact they make a majority of household buying decisions.

Over the next decade, women will control two thirds of consumer wealth in the United States and be the beneficiaries of the largest transference of wealth in our country’s history. Estimates range from $12 to $40 trillion (Note: some Baby Boomer women will experience a double inheritance windfall, from both parents and husband).

Let’s take a look at some Key Facts as reported by Digital Sherpa:

· 60% of all personal wealth in the U.S. is held by women

· Women control 51% of all stock ownership

· Women own 40% of all American private businesses

· 1.3 million women earn more than $100,000 in annual salary

· Senior women age 50+ have a combined net worth of $19 trillion

· Over the course of a family’s life, 90% of married women will control its wealth

Regardless of the market power women have they feel they are misunderstood and underserved by their financial advisors.

According to a CNBC article “Depending on how you look at it, the financial advisory industry has either a huge opportunity — or a huge problem”. The opportunity lies in the fact women represent a large and growing sector. The problem as stated in the CNBC article “Many investment advisors will never see a dime of it because they don’t know how to attract, or retain, female clients”.

Further a study by Fidelity Investments found that even when couples interact with a financial advisor, men are still 58 percent more likely than women to be the primary contact. This explains why when male clients pass away, their widows are more likely to fire the advisor as they feel the advisor largely ignored them and thus have no loyalty to “their husband’s” advisor.

And it’s not just widows who are unhappy with their financial advisor a report by Harvard Business Review states Financial services win the prize as the industry least sympathetic to women”. The report goes on to say that women cited a lack of respect, poor advice, contradictory policies, one size fits all forms, and a seemingly endless tangle of red tape that leaves them exhausted, confused and annoyed.

These quotes from women tell the real story of the low regard women have for the financial services industry:

· “I hate being stereotyped because of my gender and age, and I don’t appreciate being treated like an infant.”

· “As a single woman, I often feel that financial services institutions aren’t looking for my business.”

· “Financial service reps talk down to women as if we cannot understand more than just the basics.”

· “I’m earning close to $1 million a year and should retire with $20 million plus in assets, so I’m not right for a cookie cutter discount broker, nor qualified for high-end wealth management services.”

An unhappy customer with $20 million plus to invest represents a golden opportunity. Overall, the markets for investment services and life insurance for women are wide open and one which companies stand to gain the most if they change their approach. Right now based on the reports and studies discussed in this post women don’t feel they are respected.

When a company implements a strategy to increase attract and retain women they tend to “lump” all women together regardless of age — this is a mistake. They treat all women alike regardless of the generation they belong to. If financial services organizations what to attract female clients strategies need to be developed which views women and their needs via the prism of the “Generational Divide”.

To find out more about how to attract and retain female clients please read “Capturing Your Share of The Women’s Market”.

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