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Female Clients Present Distinct Challenges for Advisors

By Steven Lang October 29, 2015

Financial advisors used to dealing with men had better equip themselves to handle the needs and challenges of a thriving female client base, if they want to sustain a healthy practice, their peers say.

With women living longer than men and now controlling more private wealth in the U.S., according to a study published this year by BMO Private Bank, advisors need to brush up on what single women demand of investments and of their advisors.

A 2013 U.S. Trust study gives advisors food for thought:

  • “Sixty-five percent of women, compared to 42% of men, think it’s important to consider the positive or negative social, political and/or environmental impact of companies they invest in.” In fact, “women feel so strongly about the social impact of their investments that 56%, compared to 44% of men, would be willing to accept a lower return from investments in companies that have a greater positive social impact.”
  • “Women are nearly twice as likely as men to say that giving to charity is the most satisfying aspect of having wealth.”
  • “Sixty-two percent of women, compared to 76% of men, feel financially secure about the future. Of women who don’t feel financially secure, the top reason cited is their concern about having enough income in retirement.”
  • “Only 43% of women, compared to 59% of men, are very confident they have planned sufficiently for retirement income.”
  • “Only about one-third of women, 35%, compared to about half of men, 52%, strongly agree that they have a good understanding of how much risk they can tolerate when it comes to investment strategy.”

Three-quarters of Joan Antoniello’s clients are women, and she says women’s attitudes are definitely different from those of men. The principal at New York-based WeiserMazars Wealth Advisors, which manages about $100 million, says men are more focused on tangibles and are results-oriented, while women are more concerned about intangibles like values, security and freedom.

Virtually all women worry about outliving their money, regardless of worth, education or sophistication, she says. On one hand, single women with enough money to require an advisor are not new to financial matters and are busy professionals without a lot of time to sit down and shmooze, she observes. On the other, their fear of dying penniless supersedes all other emotions. “The bag lady still exists, even in affluent money,” Antoniello cautions.

Allison Alexander, an advisor with Rockford, Ill.-based Savant Capital Management, which manages about $4.5 billion, says even though single woman may be accomplished, most are still wary of investments and financial planning. An advisor’s job is to educate them about topics like risk versus return, diversification, asset allocation and rebalancing — and with that knowledge, they become more tolerant of risk, she says.

Catherine Avery

Alexander says that while facts are important, the manner of delivering them is equally so. “They are looking for someone to listen, get to know them and be an independent sounding board. They share information that they may not share with family or friends.”

Catherine Avery is founder and president of New Canaan, Conn.-based CAIM, which manages $53 million and markets itself as an advice firm that specializes in women. She says that when she worked at large firms like Morgan Stanley and Prudential, it struck her that advisors spoke differently to women and men. Like other advisors interviewed for this article, Avery says, speaking generally, that men are more knowledgeable about investments and that women need more “hand-holding.”

Avery says women want lower risk types of investments and hate to lose principal. “Since they live longer than men, they need to have the ability to outperform inflation and have a stream of income at the same time.”

To this end, Christopher Beale, founder and an advisor of New England Capital Financial Advisors, a Meriden, Conn., firm that manages about $200 million, believes that since women live longer, they should “try to save more (minimally 10% to 15% of income), work longer, keep debt levels at a minimum and take a longer distribution rate. Those would be your success factors.”

He suggests an allocation that consists of a larger percentage of equities for a longer time frame. Additionally, he would give more weight to dividend-paying large-caps to get both income and growth. The rest of the portfolio would be built around that core, he says.

Kimberly Foss, president of Roseville, Calif.-based Empyrion Wealth Management, which manages about $200 million, says women do more research about advisors than men do. They ask a lot of questions and may take longer to make a commitment.

“Most of my single women do background checks. I’ve asked them,” says Foss. She recalls one of her clients, a Berkeley Ph.D., who interviewed seven different advisors before choosing her. “It’s exhausting, but the flip side is that women are much more loyal to their advisors.”