By: Stephanie Marchant, GamePlan Financial Marketing
July 2nd, 2008

Over the last decade there has been an upward shift of women’s earning power and presence in the work force. Women control more than 51 percent of wealth in the United States and trends indicate that this growth will only continue to increase. But despite these higher earnings, women’s confidence in financial planning remains low. An astounding 90 percent of women still feel financially insecure, despite increased involvement and power in financial decision making.[1]

This tremendous growth of wealth, coupled with women’s anxiety about personal finance, has created an incredible need in the financial planning industry for a more sophisticated approach to how advisors talk with women about financial management.

Understand Her Point of View

To successfully guide your female clients in their financial futures, advisors must understand the distinct approaches that men and women take concerning their finances. Men tend to prefer more aggressive and direct tactics and are more apt to take risks, while women already feel burdened with responsibilities and look for less worry, more security and more predictability in their financial lives.

The best way advisors can help their female clients gain a desired sense of financial relief and understanding is by taking the time to learn more about their ambitions and goals. Above all else, women want a financial advisor who is honest, listens to their concerns, and thoroughly explains why they are suggesting different financial strategies. 

Every Woman is Different

While some generalizations can be made concerning the way women feel about financial planning, it is important to remember that there is no universal strategy.  Women do, however, generally fall into one of five personality profiles that reflect their views on investing. [2]  As you get to know your female clients you should be able to associate her with one of these categories, which will help you to better communicate with her.

The first two personality profiles are comprised of women who cite insufficient knowledge about money and investing as a primary reason for not working with a financial advisor. Forty-one percent of women fall into these first two categories. The first group wants someone else to take care of them financially, and the second group avoids financial planning altogether. Women with both personality types cite the same reasons for their decisions. These women feel that they lack sufficient knowledge about financial planning, and feel overwhelmed, confused, anxious and worried when it comes to investing.

The best way to approach this type of client is by keeping your initial meeting simple. She is already unclear and nervous about investing, and overloading her with information during your first meeting will most likely cause her to reconsider using a financial advisor.  Your female client will be open to learning more about her financial options as soon as she feels comfortable with the new situation.

As you hold more complicated financial discussions with these kinds of clients, thoroughly explain your recommendations and the rationale behind them. While you may feel long-winded, many women, especially those who tend to avoid financial responsibility, appreciate and benefit from lengthy and detailed conversations. Trust is a main priority in the eyes of your female clients, and by taking the time to explain and discuss her various financial options you are demonstrating that you truly have her best interests in mind.

The remaining three categories of women are very different than the first two groups in that they are all knowledgeable about investing, are likely to have worked with a financial advisor, and take on part or all of their household’s financial responsibility.  These women can be described as either:  having clear goals and taking charge of their investments; being collaborative and equally sharing in the financial decisions with their spouses; or taking the time to research and track financial results to make sure that they’re getting the best value.

Some of these women are disciplined and analytical savers while are highly communicative in their decision making processes, but the common thread that binds these three personality types together is a strong knowledge base and a high level of confidence when it comes to investing.

You do not need to take these clients through your recommendations in as much detail as you would your less-experienced clients, but your conversations will still be longer than if you were speaking with a male client.

Why Are These Categories Helpful?

Knowing how to identify what kind of personality type your female clients have will provide you with better opportunities to meet their needs and build stronger relationships with them.

So when working with a female client, stop and listen to her concerns. Ask what her level of financial knowledge is. Identify her financial personality, and then structure your approach in a way that appeals to her and her areas of interest. Listen carefully and explain thoroughly, making a special effort to avoid being condescending.  Then you can build a rapport around open communication, honesty and trust. By doing so, you will pave the way to a long and mutually beneficial client-advisor relationship.

 

Stephanie Marchant is a Field Marketing Manager with GamePlan Financial Marketing (www.gameplanfinancial.com), one of the world's leading field marketing organizations (FMOs) for independent life insurance agents and financial advisors. She can be reached at smarchant@gameplanfinancial.com or by calling 800-886-4757.