On a cool October morning in 2015, investment advisors have gathered in a small conference room. They’re here to learn about important trends in the financial services industry, the changing expectations of women investors and how, as advisors, they can communicate in an environment where the message has traditionally been oriented toward men.
Presenting to the group is Lisa Kueng, an author and executive director of Invesco Consulting.
“The worst thing you can do with a female client is ‘shrink and pink’ – When you take a financial plan for a male client, and make it smaller and pink for a female client,” Keung says.
The group, mostly women, groans as they hear an example of an advisor-client conversation gone wrong: “Think of your investment portfolio as the little black dress in your closet – it’s versatile and looks good in every season!”
Next they compare titles for an educational event focused on female investors: between Wealth Management for Women or The Female Investor Perspective, which one will resonate? (The answer is neither.)
The point: financial firms lose the message when they pander to women or tell them they require special treatment. Women are sensitive to advisors who underestimate or minimize their planning needs, stereotype or talk down to them, dismiss their concerns or assume that their husbands handle the finances. Those advisors who do risk their client leaving them for an advisor who respects them.
To counter these negative behaviours, Lisa suggests three principles that can help advisors adjust their approach:
- Experience before explanation. When explaining investment performance, put the discussion in a context that means something to her experience. If the markets are volatile, what does this mean for her plans?
- Align life goals with financial goals. In review discussions, talk about how her portfolio performance could impact her personal and financial goals.
- Be positive. Instead of trying to motivate through fear (for example, “You might not be ready to retire.”), have a positive and open dialogue. (“Let’s talk about how we can help you retire when you want.”)
Michelle Vickers, Investment Advisor with RBC Dominion Securities, agrees. In her practice, the goal-based approach creates a more engaging dialogue with her clients than discussing investments alone.
“When we use a goal-based approach, risk becomes more understandable because we have directly tied the investment strategy to their personal wealth management goals,” she explains.
Pursuing these financial life goals for, and with, female clients is as important now as ever. Women in Canada now control one third of all financial assets in North America, according to the Boston Consulting Group’s study Leveling the Playing Field. In dollar terms, this represents $1.1 trillion in financial wealth in Canada, as calculated in the 2013 Household Balance Sheet Report published by Investor Economics.
Social and societal change will continue to drive womens’ needs for wealth management that works for them. In the years to come, they will continue their ascent into leadership positions, earning and managing greater wealth as they do. To meet a client’s needs throughout all the stages of her life, the onus is on the advisor both to help her realize the big picture of her wealth, and to become part of that picture too.