A number of studies suggest that women are less than pleased with their financial advisors. One particularly notable study, conducted by the Boston Consulting Group, surveyed hundreds of women and discovered the following interesting points:
- Women control more than 25% of the world’s wealth as defined by investable assets, and that figure is steadily rising.
- Compared to men, more than half believed that they were poorly served by planners, managers, and other types of advisors.
- Specifically, they believed that men received more attention, superior advice, and better terms.
What are the possible reasons? Of course, there may be problems with perception and communication.
Unfortunately, however, gender bias is alive and well. Here are a few examples of how it influences relationships between women and their advisors (yes, even their female advisors):
- An advisor may be uncomfortable discussing personal matters with a female client.
- Advisors often wrongly perceive women as having limited financial knowledge. As such, they limit investment options and suggest reduced reporting.
- Advisors often wrongly assume that women are more risk averse than men, an error that leads to suggesting unduly conservative options.
- When meeting with couples, advisors often assume that husbands are the decision makers and ignore wives.
Just like their male counterparts, women need high-quality advice, timely communication, and sophisticated services. Here are a few ways to increase the odds of that happening:
- Due diligence – Make sure that your advisor is a bona fide wealth manager…a Trust Officer, Registered Investment Advisor, or Financial Advisor.
- Competence and ethics – Focus on these critical qualities rather than personality and salesmanship.
- Background check – Do your homework by researching the company and the person(s) with whom you may be working. Make sure that both have stood the test of time.
- Sales pitches – Don’t believe everything you hear! Remember – there is no such thing as a legitimate investment that produces high returns with low risk.
- Think team – An individual is likely to be your primary contact, but look for bench depth. Individuals get sick, take vacations, and change jobs. Make sure that there is a competent team behind this individual to render quality advice when you need it.
- Follow the money – Some compensation structures encourage advisors to sell products…instead of helping clients achieve their financial goals. Be very, very cautious when an advisor’s sole source of income is commissions!
- Ask for references – Ask for references of women who are decision makers or who control family assets. Your advisor should be able to demonstrate that he or she has experience…successful experience…working with women!
Everyone should remember that rapport with one’s advisor is less important than the merits of his or her advice/recommendations!