My first boss in the financial services industry told me I was doomed to fail, in large part because I was female. That was 1989, and while my industry has come a long way since then, in many ways it still fails women and struggles to understand us.
Our brokerage company provided training shortly after I was hired. I then presented my business plan to my boss, as required. He told me my plan was incredible, better than most he had seen, but still said, “You are a sure recipe for failure.”
Why is that? I asked.
“Because you are young, you are a female, and this is the south,” he responded. This, from the man who had hired me!
Clearly, I proved him wrong on the gender thing. My firm is thriving in the industry. We were recently recognized as a Barron’s Top 100 Independent Advisor and one of Barron’s Top 100 Women Advisors, in addition to many other accolades in the industry.*
Sadly, some of the same biases I faced as a female financial advisor in 1989 still exist in the industry today. There are sometimes different approaches taken toward women as clients and prospects. The good news is, you have options and don’t have to settle. I hope some of my advice here helps.
One thing I want to make clear – I’m not picking on men. That first boss was a powerful motivator, although in a negative way. Along my path to success, I had several powerful and positive male mentors willing to coach, commiserate and share their knowledge with me. I am eternally grateful to them.
Also, it’s NOT about the gender of the financial advisor you choose. We have male and female financial advisors in my firm. It IS about that advisor listening to you and understanding your fears, goals, and desires. In fact, it’s not about any of the generalities or biases we have toward a specific gender.
I will discuss some general trends I see in female clients when it comes to financial clout, dealing with money, and retirement goals. But, my recommendation is to figure out where the client (male or female) wants to go with their life, then determine the financial aspects and protection (investment, insurance, and legal) goals that need to be met.
First, let’s understand something about the financial clout we have as women.
A think tank called the Center for Talent Innovation’s (CTI) 2014 report on growth opportunities for women in the financial services industry estimated that U.S. women exercise decision-making control over $11.2 trillion in investable assets. That’s 39 percent of the nation’s estimated $28.6 trillion of investable assets. Nearly half of that – $5.1 trillion – is managed solely by women.
Beyond the “decision-making control” that the CTI study cites, I maintain that married women often influence investment decisions in a way I call “veto power.” These are decisions in which a husband might have done the study and research, and everything was in perfect order, until the vendor offended the wife in some way, often by talking down to her. In my experience, this will result in a fast and sure veto by the spouse.
A dysfunctional relationship with an advisor can happen even among those with larger sums to invest. The CTI study reported that more than half of the women it surveyed with $1 million or more of investable assets reported that their financial advisor did not understand them.
Fewer Female Financial Advisors
There is a large gender gap in the number of financial advisors. Financial advisors strive for the CERTIFIED FINANCIAL PLANNER™ practitioner accreditation, awarded by the CFP Board. According to that group’s statistics found here, women make up only 23 percent of the more than 75,000 certified advisors. Of course, not all financial advisors carry the certification. According to a Bureau of Labor Statistics report on the workforce from 2015, about 39 percent of all workers calling themselves financial advisors are female. The industry is working to attract more women, but clearly, there is a long way to go.
Goals Can Be Different
The financial services company Allianz published a report called the 2013 Women, Money & Power Study. The study found the financial topic women most wanted to learn about was attaining a retirement lifestyle. That is often not the top focus for financial professionals. Women are asking for clear and simple-to-understand financial information.
In keeping with the topic of what women want, it is clear that a top priority is a financial security. The same Allianz study had these startling statistics: 46% of women fear ending up broke and homeless. About half – 56% of single women and 43% of married women – fear ending up a “bag lady.” Even more startling is that 46% of “women of influence” (household income of more than $200,000 per year) have this same fear. If this strikes a chord with you, read 5 Ways to Save for Retirement.
Always begin your financial plan conversation by thinking and talking about where you want to go. The “destination” is key to figuring out how to get there. In many financial services offices, the conversation starts with investments. That strategy puts the proverbial cart before the horse. If you find yourself in that situation, insist that you focus on goals, desires and dreams first. If that doesn’t work out, it might be time to shop for another advisor.
The most important thing to expect from an advisor is that they never talk down to you, or worse yet, ignore you. If you and your spouse or partner meet with an advisor, make sure they address your concerns and you feel like an integral part of the process.
You Might Know More Than You Think
The CTI Study found that women are just as well-informed or better-informed as men on financial issues, with similar rates of men and women passing its literacy assessment. However, female confidence isn’t commensurate with their knowledge, particularly in the United States. According to the report, American women, despite being among the most financially literate women in the world, are less likely than American men to consider themselves knowledgeable.
Money Can’t Buy You Happiness, But It Can Buy You Choices
The statement above is one of my mantras. When you sit down with your financial advisor, insist on talking about where you want to go with your life. This is a time when you can examine what is important to you, then look for ways to get the financial security it takes to get there.
If you don’t have a financial advisor, then it’s time to search for one. Just remember what comes first. Make sure you thoroughly discuss and connect on the issues that matter to you before you sign over any assets.