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portfolio strategy

The financial advice business doesn't get women.

One survey found that 73 per cent of women were unhappy with the service they got from the financial industry. Among widows, 80 per cent switch advisers after the death of their husband. Roughly 87 per cent of women would like to have an adviser, but only 17 per cent actually do.

Judy Paradi and Paulette Filion, consultants with Strategy Marketing, tossed out these Canadian and U.S. statistics as they described the financial industry's troubles in dealing with women. Here's the whole problem in one anecdote. Not too long ago, an adviser came to Ms. Paradi and Ms. Filion for some insight on why he was having trouble relating to female clients.

"He described a situation where he spent two hours with one client," Ms. Paradi said. "He said, I showed her everything and I told her everything, but when she was leaving, she tapped me on the shoulder and said, 'Just tell me one thing, will I be able to retire?' The adviser was just gobsmacked. He thought he had done the right thing."

What we have here is a failure to communicate by an advice industry that, according to Ms. Paradi and Ms. Filion, is 85 per cent dominated by men. Memo to women who don't like the relationship they have with their adviser: It's not you, it's your adviser.

Here are some suggestions from Ms. Filion and Ms. Paradi on how women can establish a better relationship with an adviser:

Put some time into finding the right adviser. Talk to several and pay attention to communications skills as well as standard criteria such as credentials, experience, services rendered and fees. Don't sign on with someone simply on the recommendation of a friend or relative.

Avoid advisers who try to dominate by talking too much. You should be speaking 60 per cent of the time, Ms. Filion said. This implies the adviser is asking questions and listening to your answers.

Understand and articulate your goals. Think about what success in your investing means to you and make sure the adviser understands. Is it an average annual rate of return of 10 per cent, or the comfort of knowing your retirement is well provided for?

Don't give up on a broken adviser relationship. Ms. Paradi said she has found that women often walk away from advisers they're unhappy with rather than trying to communicate with them about what's lacking.

The overwhelming reason women cite for their unhappiness with advisers is that they don't feel respected. But women actually have a lot of clout with the financial advice business these days. In a paper they wrote on the financial industry and women , Ms. Paradi and Ms. Filion cite figures showing that huge amounts of wealth will be transferred from deceased men of the baby boom generation to their wives. "Boomer men are beginning to die at an unprecedented rate," the paper says. Canadian men typically die five to seven years before their wives; in 2013, four times as many women were widowed in 2013 as men.

These are the women who, after their husbands die, are ditching their advisers in large numbers. Ms. Paradi said these women may have never met the adviser, or been ignored if they did attend meetings. They may also feel like they're being patronized by advisers who previously dealt with the husband.

Changes in the workplace are also giving women more power to demand better from advisers. "The percentage of female senior executives, business owners and entrepreneurs who are accumulating sizable assets and wealth is rising significantly," the paper by Ms. Paradi and Ms. Filion says. "At TD Bank alone, total investable assets among women grew by 33 per cent since early 2012."

There are also regulatory reasons for the advice business to do a better job of serving women. Starting in July, 2016, investment firms and advisers will have to provide much-improved fee disclosure to clients, including dollar amounts of fees paid. Currently, investors are told only the percentage fee they're paying on their assets.

There's some concern in the investment industry that investors will be shocked to learn how much they're paying. But Ms. Filion expects women to be less concerned with the dollar amount than the value they're getting for their money. "They're better shoppers," she said.

The arguments for better serving women are persuasive, and yet Ms. Paradi and Ms. Filion are not impressed by the efforts they're seeing in this area. Even when financial firms try to tailor their messages to women, they often fail. "Everybody understands that they have to go after women because of demographics," Ms. Paradi said. "But because a very small percentage of the marketers are women, it's basically men saying, 'This is what women would like.'"

The paper quotes a few actual examples of clueless wording in marketing materials aimed at women:

"Aim higher." Ms. Paradi thinks this wording implies that what women are doing is wrong. She said women don't necessarily want to aim higher – they want to aim better, or aim differently.

"Studies show that many women are more reluctant than men to take on the level of risk required to produce investment returns sufficient to meet their needs." Sends the message women need to think like men.

"In a recent study, nearly 30 per cent of women were more interested in preserving wealth than higher returns." The implication is that this is an uninformed approach.

If Bay Street ever does figure out how to talk to women, there will be benefits that go beyond bringing new wealth into the fold. According to Ms. Filion, a woman can be a dream client for an adviser. "She'll make more referrals, and she'll be less of a pain. Once she has a plan and has bought into it, she won't be questioning things when a stock goes down. She will buy into the plan as a long-term proposition."

Failure to communicate

Here are some ways that advisers and their female clients mishear each other:

They saidShe heard
Don’t worry about thatYou’re too stupid to understand
You’ve got to learn to take riskYou’ll likely lose money
My expertise is in helping clients grow their wealthI don’t usually take on clients like you
Don’t you want to be financially independent?How can you not want to have more money?
We need to invest outside of CanadaI want to invest in foreign markets so I can maintain the upper hand over you
The facts show that it’s the right thing to doHow it feels doesn’t matter
I meet with clients in my office once a yearHe doesn’t care about my needs
You can’t get emotional about investingYou’re an airhead
She saidThey heard
I want to think about itI can’t trust what you say
I want to talk to my husbandMy husband will Google it
Can we meet?I want to waste your time
My neighbour told me about a stockI have a back-up financial adviser who will second guess your ideas
It doesn’t feel right to meI let emotions drive my decisions
How does this relate to my life?I wasn’t listening to what you said
How much do I pay in fees?I’m likely to move my account