Female millionaires — who are “heavy users of financial planning” — are a rising and attractive client segment for the advisory industry, and yet many are not satisfied with the support they’re getting from their advisors.

That’s according to Melissa Henderson, director of thought leadership at Fidelity Institutional, who spoke this week at Commonwealth Financial Network’s 2021 Virtual Summit for Women Advisors.

Communication and engagement are areas where advisors haven’t particularly impressed their female millionaire clients, according to Henderson.

“Despite the increasing power of millionaire women and their long-entrenched relationships [with advisors], advisors aren’t in touch with them as often, which is maybe a missed opportunity,” Henderson said.

Between March and October 2020, female millionaires interacted with their advisors an average of 2.8 times, far less than the average of five times for male millionaires, Henderson said, citing a survey conducted by Fidelity. She didn’t say how many responded to the survey.

Around 20% of the female millionaires surveyed wanted their advisors to be more in touch with them than they were before the pandemic. That’s more than the 12% of male millionaires surveyed who wanted more frequent interaction.

“Millionaire women are putting their trust in their advisors, they are working with them more often, concentrating their assets. But they aren’t getting enough in return, so they aren’t satisfied enough to be making referrals.”Melissa HendersonFidelity Insitutional
Half of the female millionaires surveyed said their advisors did not engage with them in an “out-of-the-box way” — webinars, shared articles, care packages or social media, for example — during the pandemic. Only 38% of the male millionaires said the same thing.

Moreover, 38% of the female millionaires surveyed said they were never asked for feedback by their advisors. Only 25% of male millionaires said the same thing.

The lack of engagement could be among the reasons many female millionaires aren’t referring their advisors to others.

Only one-third of female millionaires have referred anyone to their advisor in the last year, compared with 50% of male millionaires who did so, Henderson said, citing data from a Fidelity Investor Insights Study in October that surveyed 560 millionaires.

“Millionaire women are putting their trust in their advisors, they are working with them more often, concentrating their assets,” she said. “But they aren’t getting enough in return, so they aren’t satisfied enough to be making referrals.”

Opportunities

There are opportunities for advisors to be better at retaining their current female millionaire clients as well as for advisors to start attracting them if they don’t have them in their client roster yet, according to Henderson.

“Women have longer relationships, fewer advisors, more concentration in their share of wallet with you and giving you more trust with more of their money,” she said.

Around 74% of female millionaires worked with advisors in 2020, up from 64% in 2016, Henderson said, citing data from the Fidelity Investor Insights Study.

Female millionaires tend to rely more heavily on personal referrals than their male counterparts, but both rely on professional referrals, Henderson said.

The top factors for female millionaires when selecting their advisors are reputation, expertise and personal characteristics, Henderson said. For male millionaires, specific assets or services available through an advisor are more important, she said.

Slightly more female millionaires want their advisors to be located in closer proximity to them. Around 67% of female millionaires — compared with 60% of male millionaires — have an advisor located within 60 miles of their home or office, Henderson said.

Compared with their male counterparts, female millionaires tend to stay with their advisors longer — almost half have worked with the same advisors for more than 20 years, she added.

Unique needs

While more female millionaires have traditionally been older, there has been a rise in the proportion of younger female millionaires in recent years.

In 2016, 81% of female millionaires were boomers and the rest belonged to Generations X, Y and Z, according to Henderson. In 2020, boomers comprised 74% of the female millionaires as their younger counterparts made up a bigger share of the total, she said.

“The last thing millionaire women want is to be lumped together in one broad category. Every millionaire woman has unique individual needs that need to be addressed,” Henderson said.

“The last thing millionaire women want is to be lumped together in one broad category. Every millionaire woman has unique individual needs that need to be addressed.”Melissa HendersonFidelity Institutional
The younger female millionaires were more likely to “hire advisors during the pandemic, look online for an advisor, express more interests in products and services, and more fee sensitive,” according to Henderson.

But the younger millionaire women faced challenges when interacting with their advisor, receiving fewer services, and are less likely to be satisfied with the support they received, she said.

When asked about why advisors didn’t meet their needs, the top three reasons given by female millionaires were: “I don’t expect my advisor to offer this level of service and help me with this;” “My advisor didn’t reach out to me;” and “I wasn’t comfortable discussing these concerns with my advisor,” Henderson said.

“The question starts to become: Have women millionaires learned to expect less from their financial advisor?” she posited at the conference.

“With the shifting demographics, there’s a lot of opportunities to work with women of different stages in their life and develop alternative ways to connect,” she said.

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