The top 3 questions advisors ask about women investors

Key takeaways for advisors

• Women are growing their influence as earners and investors, and they will control a significant amount of the wealth transferring between generations in the coming decades.
• Advisors know that attracting and retaining women clients is essential for the future of their business, but many struggle to engage women and earn their trust.
• In this article, Jen Taboada, BlackRock Business Consulting’s expert on women and investing answers the top three questions advisors are asking about women investors.

Women investors are essential for the future of your business

Women are growing in affluence as they expand their foothold in higher-paying careers and climb corporate ladders. They are making big strides as investors, too. 71% of women invest in the stock market and more than 1-in-3 made a first-time investment in a new asset class in the past year.¹ Yet, women investors continue to be underserved by the financial advice industry, where a lack of understanding of women’s unique needs persists.²

The transfer of a projected $47 trillion of intragenerational wealth to women has begun.² Women have a growing need for financial advice, and advisors have a growing need to attract and retain them as clients as the great wealth transfer accelerates.

As an industry consultant and coach with specialized expertise on the topic of women and investing, I’ve been hearing more and more questions from advisors seeking insight to help them engage women investors and earn their trust. Here’s how I respond to the three questions I’m asked most often.

1. “How are women investors any different from my other clients?”

This question is fundamentally important because advisors who don’t understand the unique needs and preferences of women investors will have a difficult time driving client satisfaction with them. Be mindful of key differences in these areas:

Retirement planning. As women in the U.S. live nearly six years longer than men on average,³ their investment goals need to account for a longer retirement. Unfortunately, their greater funding needs are typically challenged with lower earnings due to gender pay differences and employment gaps for caregiving. Discuss the impact of these factors with each of your women clients and align her investments with her unique life path.

Portfolio discussions. Women prefer to focus on their goals more than investment returns. Instead of discussing how her portfolio performed in comparison to a benchmark, explain what the performance means for her life plans. For example, “If the market falls more than 3% this year, you will need to forgo the purchase of a second home.”

Investment behavior. Women are disciplined investors. They are comfortable staying on track with a balanced allocation, and given their focus on personal goals, women tend to buy and hold for the long run. However, women tend to feel less confident in their ability to make investment decisions as compared to men regardless of education level. This may be due to traditional beliefs of older generations that investing was a job for the man of the house.

Women are less confident investors than men across educational levels
Individuals who feel comfortable investing in self-directed accounts

Many women find it intimidating to talk about their finances with an advisor. You can make these conversations more approachable by educating them on investing basics. Keep it simple but not patronizing. Use plain language, not jargon. Above all, never make assumptions. The woman sitting across from you may know very little about financial matters, or she may know as much as you do.

Women prefer collaborative communication and they want to feel heard. Promote an interactive conversation (versus the traditional approach where advisors do most of the talking). Asking for her thoughts shows that you will be her partner and that you respect her ideas and opinions. Financial coaching firm Willow recommends asking questions like…

“Are you familiar with…?”
Show her that you are not making assumptions about her and that she can feel comfortable asking you questions without judgement.

“Are you interested in hearing more about…?”
If she is interested in a subject, start at a high level and pause periodically to check for understanding. Before going deeper into detail, ask if she wants to hear more.

“What worries you about your finances?”
Invite her to share her fears. Give her space to elaborate and listen attentively. What you learn might help you better serve her needs. Make sure she is finished sharing before you respond.

2. “How can I engage a client’s wife who isn’t involved in her finances?”

Having relationships with both a client and their spouse betters your chance of retaining the assets should the couple divorce or if one of them passes away. But some spouses, most often women, choose not to be involved in the family’s finances and advisors can find it difficult to engage them. My advice is to meet with the woman individually.

Many of the advisors I’ve coached didn’t like this idea at first. They said it was unrealistic that a client’s wife – who had never before participated in discussions about the couple’s finances – would agree to a one-on-one meeting with the advisor. But when these advisors learned the right approach, they found that many women were agreeable. It starts with a phone call, which goes something like this…

ADVISOR: “I’d like you to come in for a chat so I can better understand your perspective on your family’s financial goals and discuss any concerns you might have.”

WOMAN: “That won’t be necessary. My husband is handling our finances and I don’t have any concerns.”

Don’t be discouraged. When a woman says she isn’t interested in discussing her finances, it is usually because she doesn’t know why it’s important. An effective way to help her understand why she should care is to share a real-life story. As an example, one advisor told me how he replied to a woman in a dialogue similar to the above.

ADVISOR: “As I was growing up, my parents owned a business that my father operated while my mother raised the kids. It wasn’t until my father passed away unexpectedly that my mother realized the business was highly leveraged and we had a lot of personal debt, too. Without my dad running the business, it quickly went under. My mother had to work two jobs to support our household and pay down the debt. She was unable to save much for retirement, so she lives with me now and it isn’t the life she wanted. Seeing her struggle with her finances is what made me want to be an advisor. I don’t want anything like that to happen to anyone, including you.”

After hearing the advisor’s story, the woman agreed to meet with him. The advisor later told me that the meeting went much better than he’d expected. The woman shared her dreams and her fears. She asked him questions like ‘What would happen if I got divorced? Would I be OK?’ By the end of the conversation, she understood how the advisor could be valuable to her and she agreed to meet with him individually on a regular basis.

When you meet with a woman one-on-one, you will likely learn a lot about her. At the end of your first conversation, ask her how often she would like to meet. Keep the momentum going to deepen your relationship over time.

3. “How can I earn more women clients?”

If you currently serve women clients and you want to earn more, start by identifying your niche: the women of a unique profile whose needs align with your practice and whom you are most comfortable serving. You might be serving women who work in a particular profession or women in a particular financial position, like the family breadwinner. Or perhaps you serve women in a life transition: starting a business, divorcing or grieving the loss of her spouse.

To identify your niche, look for commonalities among the women you currently serve. You have likely gravitated toward a profile of women with characteristics that are reflective of the reason you became an advisor. These clients might in some way remind you of yourself, a family member or someone who had a meaningful impact on you. There is common ground between you and these women that made it easy for you to build a rapport and earn their trust.

Once you’ve identified your niche, focus your prospecting on like-minded women. Ask your best women clients for referrals and grow your network with professionals who serve women of the same profile. For example, if you want to serve more women who are facing widowhood, forge connections with estate attorneys, realtors and grief counselors. If you serve women who work in a particular field – like healthcare, education or the military – establish relationships with relevant professional organizations and credit unions where such workers qualify for membership.

Engage women investors to grow your business

Women investors tend to be loyal clients and good sources of referrals. Over a lifetime, women make an average of 26 referrals to their advisor, compared to 11 referrals made by clients who are men.⁴ Additionally, 72% of women clients who found their advisor through a referral had sought recommendations from other women.⁵

If you want to attract more women investors, consider becoming a Certified Advisor for Women^TM by participating in Willow’s training program for advisors, which can connect you with vetted women prospects. Contact your BlackRock Market Leader to learn more.

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

Access exclusive tools and insights

Explore My Hub, your personalized dashboard, for portfolio tools, market insights, and practice resources.

Get access now