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Over the next 40 years, women will inherit 70% of the $41 trillion in intergenerational wealth transfers,1 and the first thing they will probably do after receiving the money is fire you.
The reasons are not what you think: not poor investment performance, not lack of expertise. More likely, your female clients will feel misunderstood, unheard or overlooked.
Understanding women’s and men’s different psychology when they approach financial planning will be essential for advisors who want access to the business that women will increasingly control. Let’s look at how the industry has historically approached female investors, in order to understand why many well-meaning financial advisors miss the mark with female clients.
It’s important first to realize a basic fact: The financial services industry was founded by men for men. Historically, women did not control wealth, earn money outside the home, or achieve equal financial footing with men. Understandably, financial advisors tailored their pitches to the individuals with the assets – men. As the industry grew and prospered, best practices, marketing strategies, selling tactics and investment protocols were (and primarily still are) developed with the male wealth creator in mind.
Women felt left out, because they were.
With the women’s rights movement in the 1970s, it became much more common for women to earn money and create wealth of their own. With each ensuing decade, women’s economic power has increased. Currently, women control 51% of the personal wealth in the United States, and by 2030 this percentage projects to rise to 66%.2 As Virginia Slims cigarette advertisements once announced, “You’ve come a long way, baby.”
In the last decade, advances in neuroscience have shown how the male and the female brain process information differently. Each sex acts and behaves differently when it comes to communication, decision-making and investing money.1. Wojnar, K. and Meek, C. Women’s Views of Wealth and the Planning Process: Its Their Values the Matter, not Just Their Value, Advisor Perspectives, March 1, 2011.
2. State Farm Survey, 2008
