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To Cater to Women, Learn Their Language

By Joan Warner May 1, 2013

"Boring." "Irrelevant." "Useless."

Those were just some of the terms women chose to describe financial planning materials in a recent survey by Allianz Life Insurance Co. of North America. The things they said about advisors were only slightly more flattering.

Women are woefully underserved by financial advisors — and they know it. Of the more than 2,000 women who responded to Allianz’s “Women, Money, and Power” survey, nearly two-thirds said they want to be better educated in finance. Yet advisors came in a distant second to the Internet as respondents’ trusted source of financial information and guidance. And 54% said the material they get from financial planners “seems like it’s in a foreign language.”

Advisors who aspire to help women manage their growing wealth had better learn to translate, say those who know this market well. “Most financial delivery systems are in mathematical, objective terms,” says Candace Bahr, managing partner of Bahr Investment Group, an independent affiliate of LPL with $105 million under management. “Women are much more holistic in their approach.”

That’s not to say that women aren’t interested in making money. They just aren’t interested in wealth for its own sake. “If you don’t help them realize who they are, you’ve missed the boat,” says Pete Wheeler, who runs Wheeler Frost Associates in San Diego.

Wheeler thinks many advisors — including female advisors — get misdirected into thinking they should focus on managing money rather than on “helping clients achieve their dream life.” And that, he says, is much more important to women than to men.

Mars vs. Venus

Understanding the basics of male and female psychology can help advisors tailor their approach to women clients. Competitiveness gave men an evolutionary advantage, so they’re hard-wired to get a kick out of beating the market, says Bahr. By contrast, women’s pleasure neurons light up when they collaborate. “But the financial-services industry is very authoritarian,” she says. So a smart advisor might break the mold by bringing women together in an educational group, allowing them to network and share what they know. “Advisors who do that have clients for life,” says Bahr.

Bahr knows how powerful the collaborative approach can be. She co-founded the Women’s Institute for Financial Education (WIFE.org) 25 years ago and created Money Clubs, a program in which women form groups to become better-informed about saving and investing. WIFE now administers the Women’s Choice Award for Financial Advisors, a recognition program based on the votes of female clients.

A common mistake advisors make when working with female clients is assuming too much, says Eleanor Blayney, author of Women’s Worth and a veteran advisor who now serves as consumer advocate for the CFP Board. Blayney says she has seen young advisors plow ahead with a presentation without even stopping to make sure the client knows what they’re talking about. “Slow down,” she says. “Create an atmosphere that welcomes questions.”

Some women refrain from asking perfectly legitimate questions, Blayney says, because they don’t want to play into the clueless-female stereotype. Yet smart advisors should be aware that the gender gap is real when it comes to financial education. Things are changing, but women are “culturally late to the marketplace,” says Blayney. Until very recently, “boys were talked to about transactions and investing. Girls were not.”

So wealth managers — men especially — need to walk a fine line with women clients, making sure they’re being informative but not condescending. “You can’t be perceived as talking down to them,” says Bahr. “If you are, you’ve just taken five steps back.”

Given the communications issues, do women clients prefer women advisors? Not necessarily, says Wheeler. His firm, which has more than $200 million under management, is composed mostly of male advisors. But because they take all clients through what Wheeler calls a “financial DNA process,” the advisors get attuned to each woman’s feelings about money and investing.

Wheeler identifies two types of female clients: the more sophisticated, often younger or professional woman who feels self-reliant, and the less independent woman, usually older and perhaps widowed or divorced, who is accustomed to deferring to men financially — even if she out-earned her husband. In the first case, Wheeler cautions, the most important thing is to avoid treating the client like a dummy. In the second case, it might be to show that you can be a trustworthy replacement for a husband or father. “Consider the audience,” he says.

There was some good news in the Allianz report. Women who have a financial advisor feel more secure and confident about their futures than those without an advisor — and 62% are without. That means wealth managers who learn to speak the language have an opportunity to serve a large and eager market.