How to Give Financial Advice to Women: Attracting and Retaining High-Net Worth Female Clients

By Kathleen Burns Kingsbury

YOUR ONE-STOP HANDBOOK FOR CONNECTING WITH AFFLUENT FEMALE INVESTORS

"How to Give Financial Advice to Women is full of specific and useful suggestions to help financial advisors serve female clients more effectively. A great addition to any financial planner's professional bookshelf." -- Rick Kahler, CFP, coauthor of Conscious Finance and The Financial Wisdom of Ebenezer Scrooge

"Finally a comprehensive answer to Freud's famous question, 'What do women really want?'--at least when it comes to financial advice. . . . A must-read manual for financial advisors on how to work authentically and appreciatively with women." -- Eleanor Blayney, CFP, President, Directions for Women, CFP Board Consumer Advocate

"How to Give Financial Advice to Women arrives perfectly timed for advisors seeking guidance with the changing landscape of modern financial management. Addressing the dramatic rise of women in business, investing, and wealth, Kathleen Kingsbury clearly articulates how advisors can and need to understand the perspectives of female clients. Every advisor should read this book and learn these skills." -- Jim Grubman, PhD, FamilyWealth Consulting

About the Book:

During the next several decades, women will inherit approximately $28.7 trillion in assets and will need good financial guidance to manage their increasing wealth. The problem is that two-thirds of women don't trust financial advisors. Even if you are the best at what you do, a female client will pass you over if you can't effectively communicate and establish a trusting relationship with her. How to Give Financial Advice to Women is your one-stop handbook for connecting with affluent female investors.

Written by a wealth psychology expert with over 20 years of experience coaching women, this practical book helps you understand the wants and needs of affluent female clients and shows you how to appeal to this group of loyal investors. First, it breaks down the psychological fundamentals of women and wealth, and then it outlines the skill set you need to effectively communicate and advise affluent women. With the help of concrete action steps, in no time at all you will:

• Refine your advising style to appeal to women
• Be sensitive to the realities of affluent women’s lives
• Meet the unique needs of women in a variety of life transitions
• Connect with women both as individuals and as part of couples
• Build trust, actively listen, and foster financial confidence
• Help women prepare their children to receive wealth

Whether you are a male or female advisor, How to Give Financial Advice to Women shows you how the industry has historically made women feel misunderstood and undervalued and gives you everything you need to buck the trend and capitalize on being female friendly. This complete guide even comes with valuable marketing dos and don'ts to ensure you attract the right clients in the most cost-effective way.

How to Give Financial Advice to Women tells you what every wealthy woman wants her financial advisor to know.

• Language: English
• Publisher: McGraw-Hill Education
• Release date: Aug 31, 2012
• ISBN: 9780071798983

Book preview

---

Copyright © 2013 by Kathleen Burns Kingsbury. All rights reserved. Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written permission of the publisher.

ISBN: 978-0-07-179898-3

MHID:       0-07-179898-6

The material in this eBook also appears in the print version of this title: ISBN: 978-0-07-179897-6, MHID: 0-07-179897-8.

All trademarks are trademarks of their respective owners. Rather than put a trademark symbol after every occurrence of a trademarked name, we use names in an editorial fashion only, and to the benefit of the trademark owner, with no intention of infringement of the trademark. Where such designations appear in this book, they have been printed with initial caps.

McGraw-Hill eBooks are available at special quantity discounts to use as premiums and sales promotions, or for use in corporate training programs. To contact a representative please e-mail us at [e-mail].

This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that neither the author nor the publisher is engaged in rendering legal, accounting, securities trading, or other professional services. If legal advice or other expert assistance is required, the services of a competent professional person should be sought.

–From a Declaration of Principles Jointly Adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations

TERMS OF USE

This is a copyrighted work and The McGraw-Hill Companies, Inc. (McGraw-Hill) and its licensors reserve all rights in and to the work. Use of this work is subject to these terms. Except as permitted under the Copyright Act of 1976 and the right to store and retrieve one copy of the work, you may not decompile, disassemble, reverse engineer, reproduce, modify, create derivative works based upon, transmit, distribute, disseminate, sell, publish or sublicense the work or any part of it without McGraw-Hill’s prior consent. You may use the work for your own noncommercial and personal use; any other use of the work is strictly prohibited. Your right to use the work may be terminated if you fail to comply with these terms.

THE WORK IS PROVIDED AS IS. McGRAW-HILL AND ITS LICENSORS MAKE NO GUARANTEES OR WARRANTIES AS TO THE ACCURACY, ADEQUACY OR COMPLETENESS OF OR RESULTS TO BE OBTAINED FROM USING THE WORK, INCLUDING ANY INFORMATION THAT CAN BE ACCESSED THROUGH THE WORK VIA HYPERLINK OR OTHERWISE, AND EXPRESSLY DISCLAIM ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. McGraw-Hill and its licensors do not warrant or guarantee that the functions contained in the work will meet your requirements or that its operation will be uninterrupted or error free. Neither McGraw-Hill nor its licensors shall be liable to you or anyone else for any inaccuracy, error or omission, regardless of cause, in the work or for any damages resulting there from. McGraw-Hill has no responsibility for the content of any information accessed through the work. Under no circumstances shall McGraw-Hill and/or its licensors be liable for any indirect, incidental, special, punitive, consequential or similar damages that result from the use of or inability to use the work, even if any of them has been advised of the possibility of such damages. This limitation of liability shall apply to any claim or cause whatsoever whether such claim or cause arises in contract, tort or otherwise.

For My Mom

Contents

Acknowledgments

Introduction

Part I: Women and Wealth

Chapter 1: The Underserved Client

Chapter 2: The Psychology of Women and Wealth

Chapter 3: Your Affluent Female Client

Chapter 4: Women in Transition

Part II: Essential Skills for Advising Affluent Women

Chapter 5: Building Trust

Chapter 6: Active Listening

Chapter 7: Fostering Financial Confidence

Chapter 8: Advising Women in Couples

Chapter 9: Preparing the Next Generation to Receive Wealth

Chapter 10: Marketing to Affluent Women

Afterword

Notes

Female-Friendly Resource Guide

Index

About the Author

Acknowledgments

A MENTOR ONCE SAID TO ME, NOTHING IS EVER REALLY ACCOMplished alone. These words were never truer than when it came to writing this book. I have so many wonderful colleagues, clients, and friends for whom I am grateful. Their wisdom, emotional support, and much needed laughter during the writing and publishing process was invaluable. I especially want to acknowledge:

My agent, Ken Lizotte, for believing in my book idea, finding a top-notch publisher, and supporting me even after the contract was signed. An agent who supports a writer during all phases of the process is rare, so thank you.

My acquisition editor, Jennifer Ashkenazy, for seeing the value of a book about affluent women for men, my editing manager, Jane Palmieri, and all the staff at McGraw-Hill who worked to make this book the best it could be.

The strong and powerful women in my life, who stand by me in good times and bad, and encourage me to dream big and celebrate both my small and large victories, especially Wendy Hanson, Fran Goldstein, Lauran Star, and Meridith Elliot Powell.

My past writing group partners, Susan Hammond and Stacey Shipman, for hanging in there with me when a publisher was nowhere on the horizon.

My male colleagues who, when called upon, offered the important male perspective and let me be (or at least think I was) one of the guys, especially Tom Burke, Chris Bilello, and Jim Grubman, PhD.

The KBK Wealth Connection team for handling the details so I can focus on the big picture, especially Kelly Pelissier, Kathy Goughenour, Mary Hanley, Nicole Pillemer, and Tracy Pierce.

My independent study student from Bentley University who helped with this project, Rick Harkins.

The many wonderful women and men I interviewed for this book. Your openness to talk about a taboo subject and to share your insights into the advising and wealth management industry brought this book to life.

Lastly, I want to thank my husband Brian. Your faith in me and my ability to see projects through to the end—even when I can’t see the end in sight—is a true gift that makes my life so much richer. Thanks for always loving me, for making me belly laugh every day, and for joining me on this adventure called life.

Introduction

FINANCIAL ADVISORS HAVE A BAD REPUTATION WITH WOMEN. MOST feel slighted by the industry and see it as catering only to male wealth creators. They resent the assumption that women are disinterested in financial matters, are not good with money, and should not worry their pretty heads about it. They are dissatisfied customers, who have real economic power. And they are unhappy that the financial services industry does not provide products and services to meet their needs.

This dissatisfaction is not a new phenomenon. However, the financial crisis in 2008 and unethical advisors like Bernie Madoff certainly didn’t make matters any better. While none of these factors are your fault individually, as a financial advisor working with high-net-worth clients you should be concerned. You have an uphill battle when it comes to attracting and connecting with female clients, and retaining them in your practice. And these women are getting wealthier by the day.

Over the next several decades women will inherit approximately $28.7 trillion in assets as a result of intergenerational wealth transfers.¹ Many of these women will become double inheritors, inheriting money from both parents and spouses. Others will accumulate wealth through their own professional and business accomplishments. In fact, women-owned businesses are growing at twice the national rate and account for 40 percent of privately held entities.² This growth is so rapid that one recent report by the Center for Women’s Business Research claimed that if U.S.-based women-owned businesses were their own country, they would have the fifth largest GDP in the world.³ This statistic alone makes a strong argument for why you need to learn more about affluent female clients and how to stop underserving them.

There is one advantage to the financial advising industry historically underserving affluent female clients: it makes your task of becoming a sought-after financial advisor for wealthy women easier. Start by reading this book and investing the time it takes to increase your knowledge about women and wealth. Capitalize on what you already know, and add some new skills specifically designed for advising women. With a little practice, you can quickly become the advisor women talk about, refer to, and want for their friends.

How to Give Financial Advice to Women: Attracting and Retaining High-Net-Worth Female Clients is a book designed to give you an overview of female psychology and provide you with the skills you need to connect and communicate with affluent women in order to retain them in your practice. For the purposes of this book, I defined affluent as a person having $1 million or greater in investable assets. The book is packed with information about how women think and feel about money, life, and their financial advisors. Part I of the book, Women and Wealth, teaches you the basics about the psychology of women and wealth. Topics include understanding the female brain and its impact on your advising style, the myths and realities of an affluent woman’s life, her greatest concerns and how you can help, and the special needs of women going through various life transitions. By studying the emotional underpinning of the female experience, you will be better equipped to truly connect with women both individually and as a member of a couple.

Part II of the book, Essential Skills for Advising Affluent Women, provides specific communication and advising techniques that are necessary to serve affluent female clients well. These skills include building trust, active listening, fostering financial confidence, working with women in couples, and preparing the client’s children to receive wealth. This part ends with a chapter on how to market to affluent women and includes marketing dos and don’ts to make sure you are investing your time and resources wisely.

It is worth mentioning that How to Give Financial Advice to Women includes generalizations about male and female behaviors. Some facts are presented in a simplistic view to make a point or teach a concept. Please keep in mind that with any conversation about gender, some of the information may apply to your clients and some may not. For instance, while I am a woman writing about female clients, my thoughts and behaviors don’t always conform to the gender research findings. I like to verbally spar with others; I am not patient or very nurturing when skiing with those new to the sport; and I don’t like to cook, clean, or sew. It is easy to see that if an advisor made an assumption about me based on my gender, he would be incorrect and would potentially lose my business. Make sure you always view your female clients as individuals first and members of a gender second.

I have been asked frequently why I wrote a book on advising women for men. There are two reasons. First and foremost, I am passionate about empowering women. My entire career has been dedicated to inspiring them to feel better physically, emotionally, and financially. Over the years, I have witnessed too many women struggling with financial confidence, ignoring their financial lives, and fed up with the financial advisors they come into contact with. This book is written for them and all that they could not say to you. I want to stack the deck so that when a woman reaches out to the financial services industry, it is easy to locate a competent and caring female-friendly advisor.

The second reason I wrote this book is because I love coaching entrepreneurs. It is fun to share my expertise with financial advisors like you who are looking to build your book of business, who want to make a name for yourself in the industry, and who enjoy mastering the art of advising women. It is a great challenge to use my two decades of psychological training and consulting experience to reach out to advisors who are primarily male and inspire them to work with women. I have spent many weekends skiing and mountain biking with the boys and many weekdays listening to my female clients’ stories. My hope is to share what I have learned from both genders to bridge the communication gap between affluent female women and their advisors.

I hope you enjoy and benefit from reading How to Give Financial Advice to Women. Like you, I am an entrepreneur who is always learning more about how to best serve my clients; therefore, I welcome your feedback. Please e-mail me at [e-mail] with your thoughts on the book and how your female clients react to the tools and tips offered. Also feel free to check out my company’s website at http://www.kbkwealthconnection.com. It is constantly being updated with articles, blogs, and other useful tools.

Until then, happy reading!

Kathleen

PART I

Women and Wealth

1

The Underserved Client

People will forget what you said, they will forget what you did, but they will never forget how you made them feel.

–Maya Angelou, American author and poet

OVER THE NEXT 40 YEARS, WOMEN ARE DUE TO INHERIT 70 PERCENT of the $41 trillion in intergenerational wealth transfers, or approximately $28.7 trillion in assets.¹ The first thing a woman is likely to do after receiving her inheritance is fire you. She will leave your firm and hire your competition not because of lack of investment performance or because you are not an expert in the field, but because she feels misunderstood, unheard, or overlooked.

Female clients need trustworthy, caring financial advisors like you. Women want advisors who provide sound financial advice to help them navigate life’s ups and downs. Each client wants to know in her gut that you are on her side and that you understand how complicated it can be for her to care for herself while caring for others. She wants to be validated as an intelligent and competent person and feel like a client that you desire, not one you have to put up with. Overall, women simply want the same time, attention, and service you provide her male counterpart.

Unfortunately, this is not the experience for the majority of women. According to a State Farm Survey conducted in 2008, two-thirds of women don’t trust financial service professionals.² More recently, the Boston Consulting Group surveyed 12,000 women from 21 countries for its Global Inquiry into Women and Consumerism study and discovered women are most dissatisfied with the financial services industry, of all industries, on both a service and product level.³ These are startling statistics and provide strong evidence that the financial services industry has missed the mark with female clients.

This does not mean you have to continue this trend in your practice. In fact, it makes good business sense not to. Here are some facts you may not know:

Women control the majority of personal wealth in the United States.⁴

Women make approximately 80 percent of family household buying decisions, including those related to banking and financial services.⁵

Of affluent women, 88 percent are moderately or highly involved in the oversight and management of their assets.⁶

One in five firms with revenue of $1 million or more is woman owned.⁷

The economic impact from women-owned businesses is $2.8 trillion annually.⁸

As the old Virginia Slim’s cigarette commercial used to say, You [women] have come a long way baby!

Interestingly enough, the financial services industry is not the only one to historically overlook or discount the power of the female consumer: it has happened in the automobile, real estate, and technology industries as well. Progressive companies are scrambling to make up for past mistakes and win back or capture this important demographic. And based on just the few statistics above, you can see why.

Women are an important part of the client population and will continue to become more influential as time progresses. As a financial advisor, you can’t afford not to learn how best to serve a woman and her family. She has the money and the decision-making power, whether she wears it on her sleeve or not.

The Opportunity: Female-Friendly Advisors

Women are looking for female-friendly advisors to work with now and in the future to help them receive, build, and pass on wealth. These advisors need to be knowledgeable, credentialed, and competent. They must possess communication and relationship-building skills specifically designed for working with female clients. In addition, they must understand a woman’s need to build trust slowly, to be emotionally validated by her advisor, and to be able to share her story as part of the financial planning process.

Female-friendly advisors do not have to be women. In fact, many of them are not. Instead they are financial professionals who appreciate a woman’s unique circumstances and the demands of being a wife, mother, daughter, friend, and professional. As Tom Burke, vice president of investments at South Shore Savings Bank, shares, Women tend to be more ‘advice receptive’ than men. There tends to be a greater appreciation of the time invested on both sides to develop a basis for trust that goes beyond investment performance. Women are willing to take time to get to know you and work with you. But you have to be willing to invest the time as well.

Thirty percent or less of financial planning professionals are women.⁹ Therefore, it is good news for male advisors (and their female clients) that this skill can be learned regardless of the gender of the advisor. And when done well, it will improve client satisfaction and retention ratings and help increase assets under management in the long run. Also, advising female clients can become a truly rewarding part of your job. As Burke puts it, Meeting and developing relationships with many wonderful, powerful women is a reward I appreciate every day. Not to mention that working with women in transition has made a significant financial impact on my practice.

Not sure how to serve female clients well? Then you have picked up the right book because in the next several chapters, I will show you how.

---

IN HER OWN WORDS

My former financial advisor is a good example of a competent financial professional who failed to really listen and understand my needs as his female client. After the 2008 financial markets crashed, both my husband and I went to see this advisor. On the car ride over we decided how we wanted to handle our investments and talked about our respective feelings regarding the loss. I waited the whole meeting to communicate this information to our advisor, but I never got a chance. He spent the whole meeting talking about the history of the stock market and how this was an anomaly. But he never asked me or my husband one question about how we felt about the value of our portfolio decreasing. He was too busy showing us how smart he was. After that meeting, I convinced my husband to fire him. I just can’t work with someone who does not listen.

—MARY, 39 YEARS OLD, MARRIED, CAREER PROFESSIONAL

---

While female clients let go of financial advisors for a myriad of reasons, it usually boils down to one key factor—listening. Just like Mary did not feel heard by her advisor in their last meeting, many female clients complain that advisors don’t listen and try to sell them products and services before they really get to know them.

Why the Financial Industry Missed the Mark

There are a few reasons why women have been overlooked by the financial advising industry for so long. First, the financial services industry was founded by men for men. Topics such as women and investing, women and wealth, and the value of female leadership in financial institutions have only entered the conversation in the last decade. It simply was not an industry focus. Second, women historically have not controlled wealth, earned money outside the home, or achieved equal financial footing with men. Financial advisors went after the individuals with the assets, and those individuals were not women. Last, many women suffer from a lack of financial confidence. Their silence at meetings, avoidance of financial discussions, and lack of investment and financial knowledge has been misinterpreted as not caring about money. Many women want to be more financially confident, but fear asking for help from financial advisors who use jargon and language that does not make sense to the average person.

It is ironic that financially savvy women feel pigeon-holed by the women and wealth movement and resent being lumped together with all women into one broad category, women and money. As you can see, there is no one contributor and no easy solutions to serving affluent female clients better.

Men, Men, Men

The financial services industry was created by men to serve the male wealth creator; therefore, it is no wonder that women have felt left out. They were and still are. Approximately 80 percent of financial advisors, 90 percent of brokers, and 84 percent of financial corporate officers are men.¹⁰ The industry’s best practices, marketing strategies, selling tactics, and investing protocols were and still are developed primarily using a male’s brain which thinks, acts, and behaves differently than the female’s brain. In her bestselling book The Female Brain, Dr. Louann Brizendine shares that male and female brains are 99 percent the same, but the 1 percent gender difference in brain chemistry is evident in every cell of the body and it is what makes a man, a man and a woman, a woman.¹¹ It makes sense that if one gender is creating, developing, and selling financial services and products, then the end result would be heavily skewed toward that gender.

A good example is investment performance reporting. It is a common practice to share a client’s return on investment for the year by comparing it to a standard benchmark such as the S&P 500 Index. The idea is that if you outperform this benchmark, you have done well and your advisor is a keeper. This approach to reporting is very male centric. Men like to compete and win, so if a male advisor lets the male client know that together they have beat the S&P, this makes both of their brains very happy.

However, for a female investor, this type of reporting may, and often does, fall flat. Her definition of success is not about winning and losing against the market, but instead is based on how well her portfolio performed in conjunction with her long-term life goals and objectives. He wants to win. She wants to survive and