What Women Want from Advisers

Sometimes it’s getting back to the simple things, like making sure both partners in a relationship are participating in a conversation, says Jaylene Howard, consulting director for Russell Investment’s U.S. private client consulting group.

Recent research from the global asset manager, “What really matters to women investors,” explores the financial needs of women in two age groups—Generation X, ages 32 to 47, and the Silent Generation, ages 67 to 80—and includes insights from financial advisers who serve female investors.

The same goes for follow-up, Howard tells PLANADVISER. “Don’t follow up just one,” she says. “Include both partners in all communications.” Since women have a tendency to hang back in financial discussions, Howard suggests opportunities to invite them into the conversation.

“Be proactive in the communications you send,” Howard suggests. Russell’s research shows that Gen X women in particular turn to websites, blogs and other sources to seek investment information. “Advisers can send an email that refers to a previous conversation,” she suggests. The adviser can bring up a topic that was raised previously and send a link to an article, along with an email that says, for instance, “In our last conversation you mentioned you were particularly interest in estate planning.”

A substantial majority of women in the survey (86% of Generation X and 87% of Silent Generation women) cited active listening skills as the most important factor to a successful and lasting relationship with their advisers.

Active listening is a skill, according to Howard, which is good news: “You can get better at it,” she says. “It’s a way to communicate that requires that the listener share back what they hear from the speaker. Focus first on understanding the client.”

The adviser should be empathetic, nonjudgmental and listen with undivided attention, noting words as well as body language, Howard says. Repeating and paraphrasing the client’s statements helps establish a base level of communication.

Keeping an Adviser

One surprising finding of the study, contrary to a commonly cited industry belief, a majority of women (93% of Silent Generation and 78% of Generation X) would stay with their current adviser, even after the death of a spouse or partner.

Howard feels that multiple factors could be responsible for this. “Coming out of the global financial crisis, clients demanded a much higher level of interaction from their advisers,” she says. “What we’re seeing now is that really good advisers use that demand as an opportunity to strengthen their relationships with their clients.”

The financial crisis might play a part, according to Howard, since it may have served as a catalyst to galvanize women into greater activity in their financial lives. “They saw their account values drop, and if they weren’t being active, that was a catalyst,” she says. The rebounding of equity markets over the past five years could also be a factor.

Howard says a notable finding of the research was the need for advisers to establish personal connections, particularly for women in the Silent Generation. “Women want holistic wealth management,” Howard says. The advisers who have the highest satisfaction ratings from clients understand more than simple financial facts. They have a complete picture of a client’s life.

“We were surprised, given the level of satisfaction with advisers, that no more than one in three advisers knows everything about a client’s financial goals and concerns,” Howard says. The advisers knew where the money was invested, and what financial products the client had. They knew less about more personal financial goals, such as saving for a child’s education or leaving a legacy.

Women Lack Confidence

Women may participate more but they still lack confidence, according to Russell’s findings. “Advisers have an opportunity to bridge that confidence gap,” Howard says, “by reaching out more, listening, and being proactive.”

“The most influential piece is active listening,” Howard says, “and it is the one that can really change the relationship for the adviser, too.” The more an adviser can get a client to open up and share her financial concerns and goals, the more possible it is for the adviser to help a client attain those goals.

Mathew Greenwald & Associates conducted two surveys in March 2013 on behalf of Russell Investments on women and investing, which focused on financial advisers and women investors in two age groups: Generation X (ages 32 to 47) and the Silent Generation (ages 67 to 80). One survey queried advisers about their relationships with women investors in these groups and the other sought out the woman investor’s point of view for each generation.

The adviser survey includes the results of 343 respondents, while the women investor survey includes 901 individuals (501 Gen X and 400 Silent Generation). In order to qualify for the study, women investors were required to have at least $100,000 in investable assets (Gen X) or $500,000 in investable assets (Silent Generation); work with a professional financial adviser; and meet the age requirements mentioned above.

Advisers who participated had to be employed as an independent financial adviser, planner, or RIA, or work for a wirehouse or national firm, regional broker/dealer, or independent broker/dealer for at least three years. They needed to generate at least 75% of their business from the sale of individual products and services and earn at least $100,000 in personal income from the sale of financial products and services.