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Engaging Women: It’s a Business Issue, Not a Gender Issue

When looking to strengthen and retain client relationships, as well as identifying the next growth opportunity, financial advisors have learned a simple and powerful lesson: Pay close attention to demographics and align yourself accordingly.

For decades the advice industry has been focused on a male audience, resulting in books of business primarily weighted to a male population. However, the markers of transition are difficult to ignore. Wealth is shifting to new demographic groups, requiring advisors to re-evaluate their approach to client engagement in general and to women in particular.

For advisors still thinking this is a gender issue, it’s time to fully consider the business issues at hand in terms of opportunity and risks.

Women as a business opportunity

Women control 51% of wealth in the U.S. today, and are projected to control two-thirds by 2020. They’re behind 73% of household spending, and when they work, 40% of them have salaries that outpace their husbands.

Over the 15-year period that ended in 2011, women-owned businesses grew at a rate 1½ times the national average. Today, more than 8 million women own U.S. businesses that generate a whopping $1.3 trillion in revenues.  If baseline demographic data isn’t enough to convince you, consider the estimated $2 trillion of money “in motion” due to divorce or widowhood among American women.

Regardless of the statistics you read, women as a group represent a significant opportunity as their control of wealth grows. When disengaged, however, they become an enormous risk.

Women as a risk, if not engaged

Many of your married clients will one day become one client – the wife. This transition could happen sooner or later, but one thing is certain. It will happen. Consider these statistics:

  • Divorce rates in the U.S. have been estimated to be as high as 50%.
  • Women outlive men by five to six years.
  • Approximately 70% of widows will change advisors within the first year of the death of their spouse.

More and more frequently we are hearing about advisors who lost business because they didn’t fully engage the female half of the couple. Given that women are more dissatisfied with the financial services industry than any other industry in their daily life, advisors should anticipate that they’ll have to work harder to win over women.
Women are attractive prospects for financial advisors

Fortunately, this opportunity and risk actually plays to an advisor’s sweet spot. Numerous studies from reputable sources such as Forbes, Time, American Express and Allianz have revealed desirable qualities that women, as a group, exhibit. Specifically, they want to work with an advisor. As clients, they demonstrate greater loyalty, assign a higher value to the advice they receive, and have a preference for a planning-based approach versus an investment performance based approach. This is exactly what many advisors want in a client.

The evidence is clear. Engaging women is not simply a gender issue. It is an important business issue that rightly deserves a place in any advisory firm’s strategic plan. The time to start is now.

In our next article, I’ll present an in-depth view of the attributes that make women uniquely different from male clients, along with insights you’ll want to consider as you tailor your firm’s approach to engaging women.

Laura Kogen is vice president within the practice management and consulting organization of Fidelity Institutional Wealth Services, a Fidelity Investments company and a leading provider of trading, custody and brokerage services to registered investment advisors, trust institutions and third party administrators.


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