Women investors: Don’t overlook these heirs of generational wealth

Key takeaways

• A significant portion of the generational wealth transferring to heirs in the coming decades will first be controlled by widowed women.
• 80% of widowed women leave their advisors within a year of their husband’s death, but there are actions you can take to retain their business.
• Involving a woman early in the client relationship improves the likelihood that she will remain with you through widowhood, creating an opportunity for you to serve her children as well.

Women are pivotal clients amid the great wealth transfer

The great wealth transfer creates a catalyst for significant changes in the financial advice industry. A staggering amount of generational wealth — $124 trillion — is projected to transfer to heirs and charities by 2048.¹ Advisors broadly will need to evolve the way they engage clients as control of assets changes hands. While many advisors are focused on appealing to younger investors, you can still be at risk of losing assets if you overlook the role of women investors in the great wealth transfer.

Cerulli estimates that $54 trillion of wealth will transfer to widowed spouses, 95% of which will be women, before eventually transferring to children or other heirs. On average, women outlive their husbands by more than 12 years.² Continuing to serve a widowed client through these years not only lengthens your original client relationship, but additionally gives you an opportunity to retain the assets with the next generation after she passes away. But don’t assume she will stay with your practice. 80% of widows leave their advisors within a year of their husband passing away, most commonly due to a lack of relationship.³ The good news is that there is something you can do about it.

A significant portion of generational wealth will transfer to spouses
Flow of generational wealth, projected, 2024-2048

Involve women early in the client relationship

When a client passes away, your chances of retaining the widowed woman as your client are significantly higher if you already have a relationship with her – and the longer that relationship has existed, the greater the likelihood that she will trust you with her finances when she is on her own. Involve her in the couple’s goal-setting and financial planning, ideally from the beginning of the client relationship.

As you plan your client meetings, encourage both spouses to attend. If the woman does not accept your invitation, reach out to her directly and let her know that her input would help you better serve her family’s needs. If she seems uninterested in her finances, meet with her individually. If that sounds challenging, read “The top 3 questions advisors ask about women investors.”

During your meetings with client couples, be intentional about including the woman in the conversation. For example:

• When you ask the couple about their financial goals or concerns, make eye contact with each of them; this signals that you regard her as an equally important participant.
• After you share information with the couple, ask each of them individually if they have questions.
• When you present a plan or recommendation, ask “Does that sound good to both of you?”

In each case, be sure to pause and give her space to speak. Women prefer collaborative communication and they want to feel heard.

Most importantly, never make assumptions about a woman’s level of financial knowledge. She may know more than her husband does. On the other hand, she might know very little. Approach each topic of discussion by asking “Are you familiar with…?” This shows her that you are not making assumptions and that she can feel comfortable asking you questions without judgement.

Engage widowed women with patience and sensitivity

Approaching a recently widowed woman is a delicate situation. While you want to take action to retain her as a client, you also need to be sensitive to her loss, which means being patient and giving her space. The right approach will depend on your relationship with her, but there are generally appropriate guidelines for engaging widowed women:

• Give condolences promptly upon receiving the news. If you have a close relationship with the widow, go ahead and pick up the phone. If she doesn’t feel up to taking your call, leave a voicemail (don’t text) so she can hear the sincerity in your voice. If you don’t have a close relationship, it may be too soon to reach out by phone. Consider sending a card instead.
• Pay your respects in person. Attend the services or visitations published in your client’s obituary. If you choose to send flowers to her house or the funeral home, ask the florist to attach a personal note from you. Do not use your business card.
• Send a gift. A couple weeks after the funeral, consider sending a gift card she can use to have a meal delivered to her home. Include a personal note to let her know that you will be there to help when she feels ready. Provide your phone number and wait for her to reach out on her own.
• Give her time. If you don’t hear from her after a few weeks, call and ask her how she is holding up. If she seems open to talking about her finances, ask when she will be available to meet with you. But if you sense she needs more time, simply let her know you are there for her if she needs anything and tell her you will check on her again in a few weeks.
• Offer to meet at her home. Everyone processes grief their own way. She may be in need of social interaction outside the home, or she may not be feeling up to going out in public yet. Having a meeting in her own home might make it easier for her to discuss her finances with you.
• Suggest inviting a trusted person. It can be difficult to think straight or remember things while coping with a deep loss. As you discuss meeting arrangements, suggest that she ask a family member or friend to accompany her to take notes and help her follow up on any open items after the meeting.

If the woman had not been as deeply involved in her finances as her husband had been, she may be unaware of her financial situation, which could create additional anxiety for her during an emotional time. You can give her comfort by helping her gain an understanding of her finances and showing her how you can be of service to her going forward.

Create opportunities for future business growth

By proactively building a relationship with the woman of a client relationship, you markedly improve the likelihood of retaining the account when she becomes a widow, and you create an opportunity to earn the trust of her children – the drivers of your future business growth.

BlackRock can help you build trusting relationships with women investors. Learn more about the BlackRock Business Consulting team or use our online resources.

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