What does a woman (investor) want?

December 30, 2016 | Joe Giannone

U.S. women are increasingly financial decision-makers and the breadwinners of the household, yet many feel they don’t get enough attention from financial advisors.

Numerous studies show that advisors – the majority of whom are male – may tend to focus on working with men or forming deeper relationships with the husband in large part because it’s how they’ve always done business.

That’s a missed opportunity, considering U.S. women collectively control $11.2 trillion in assets and typically hold the, ahem, purse strings. So it’s in the best interest of advisors to understand how to work with women investors, meet their needs and to create firms attractive to women.

So, what do women investors want? A recent InvestmentNews / Kiplinger’s survey of more than 1,500 affluent investors concluded women usually want the same things as men, but with a different priority or emphasis.

Take financial goals. Both men and women rank retirement planning as a top concern, but women who were thinking of hiring an advisor were also more likely to set a comfortable retirement and peace of mind as their top goals.

The next most important financial goal for women was to lead a comfortable and predictable lifestyle. Accumulating as much wealth as possible came in last. Men were also more likely to list leaving a legacy for heirs as a top goal than women.

There are more dramatic differences in where men and women go to get financial information. Women investors overall said they relied the most on personal contacts — advisors, family and friends — as sources of financial information.

Indeed more than a quarter of these respondents said they primarily learned about investing and personal finance from their advisor, compared with 20 percent of men. Likewise, 61 percent of women who already use advisors consider them a primary source of information, compared to 53 percent of men.

Most men, the study found, were more likely to seek investing information from financial television programs.

Topics of discussion might also differ. Among self-directed female investors who say they are likely to hire an advisor in the coming year, nearly three out of four said they considered retirement income planning the most valuable financial service.

Prospective female clients respond to marketing messages that focus on maximizing retirement income, achieving financial security, independence and sound planning, rather than getting rich.

Young women looking to hire a financial advisor are also prioritizing and assigning value to planning for their children’s education.

The survey concluded that women, contrary to popular wisdom, are more likely to be financial decision-makers and more likely to make household financial decisions than is generally believed.

It’s also important to recognize the differences between groups of women. Many high-achieving, “breadwinner” women consider themselves highly knowledgeable investors and 32 percent said their tolerance for investment risk ranged from above-average to high.

Affluent unmarried women, compared with women overall, place a higher value on tax planning and tax preparation and on investment management.

Unmarried women – whether divorced, widowed or never married – showed themselves to be confident investors. Rather than being unsure of themselves, single women tend to be knowledgeable as well as engaged in investing. Contrary to expectations, they are not risk averse.

Finally, women investors were found to have more reasonable, measured expectations for their finances.

After many years of market turbulence and economic uncertainty, women and men seem to agree on one thing: they are more interested in planning their retirement than they are in getting rich.

For those women who choose to work with a professional advisor, the key is to find someone who takes time to communicate, spends time walking through financial alternatives aligned with client goals and makes the effort to build a strong client relationship.

Home page image courtesy LILA Photo