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Inside the Market The investment advice business is testosterone city – here’s how women can fight back

Too few men in the investment advice business know how to talk to female clients.

“Women have more and more money, and they’re looking for advisers that they connect with,” said Judy Paradi of the financial services consulting firm StrategyMarketing.ca. “And on the other hand, we talk to advisers all the time who simply do not know how to find female high-net-worth clients. They’re used to prospecting for men, they’re used to the golf course, they’re used to Sales 101.”

Ms. Paradi and her business partner, Paulette Filion, offer workshops and online courses that show advisers how to earn the trust of female clients. Ms. Paradi and Ms. Filion can help women as well by showing them what female-friendly financial advice looks like.

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The perception of the investment industry that women have is shaped by two realities – 80 per cent of advisers are men, and the emphasis in many advice firms is at least as much on selling products and generating fees as providing advice. Adviser-client relationships are often about managing investments because that’s where the money is for the advice firm.

According to Ms. Paradi and Ms. Filion, 87 per cent of women who are looking for an adviser say they can’t find one. U.S. studies show that 70 per cent of women change advisers after the death of their husband. The focus placed by the advisory business on investing over people is a big part of this dissatisfaction.

Ms. Paradi told the story of a friend who had gone through some major life changes and sought the help of an financial adviser. This woman sought reassurance that her family was on solid ground, financially. What she got was a lot of talk about portfolios, investments and rates of return that offered her no comfort.

“Finally, at one point, the adviser said, ‘look, you know what – you will die with money in the bank,’ ” Ms. Paradi said. “And that’s what finally made her feel comfortable.”

The most important attribute for advisers who want to help women might just be the ability to translate money matters into what’s happening in the lives of their clients.

Women want financial planning and investment advice that is relevant to their life goals, Ms. Filion said. “For men, it’s about how much money will I make, how will my money grow? Women think of money in terms of, can I stay in my house or can I retire with enough income or can I take care of my ailing mother?”

To make this connection between money and goals, an adviser needs to put more effort into listening to clients than he or she might with a male client. Ms. Paradi says the adviser who understands how women think about money asks a lot of questions and responds to the client’s answers with more questions. An adviser’s skill can be seen in the way he or she connects the client’s personal situation with opportunities to provide advice.

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Bad listening skills tend to lead to bad advice. Ms. Paradi recalls interviewing a couple of women with differing life situations but similar levels of wealth who went to an adviser around the same time. “They got exactly the same financial plan, except one has a very ill husband and the other one has a child who is handicapped and will need money. One has a huge mortgage on their house, the other one doesn’t. The plans these women received had no connection with their life at all.”

Surveys consistently show that women feel they don’t understand money and investing as well as men. But Ms. Paradi said that when the financial knowledge of women and men has been directly compared, it was found to be quite similar. That’s why she and Ms. Filion believe advisers who understand women will help reinforce their confidence about financial matters.

This ties in with another attribute of the adviser who is in sync with female clients – a willingness to dispense with jargon and keep conversations clear and comprehensible.

One more feature of a highly functional relationship between advisers and female clients is respect. Male advisers sometimes have trouble with this one, Ms. Paradi said. “Their understanding of respect is different: ‘I open doors, I offer a glass of water.’ Respect is much bigger than that. It’s respect her time, and respect her needs.”

The best way to demonstrate respect comes back to the idea of communicating about investing and money in a way that relates to real life. Ms. Filion said women have a particular fear of running out of money, which happens to be fully justified based on their longer lifespans than men on average.

The respectful adviser acknowledges this fear and addresses it – not in rates of return, but with numbers that speak to how people manage their money in day-to-day life.

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“Telling a woman she’s got $2-million or a 6 or 7 per cent rate of return – she doesn’t know what to with that,” Ms. Filion said. “But if you say, ‘right now your portfolio can generate $5,000 a month and, if you upped your savings, we could probably get up to $6,000’ – that all of a sudden connects money to something that’s important to her.”

What women want in an adviser

Financial industry consultants Judy Paradi and Paulette Filion run workshops and online courses for advisers who want to better connect with women clients. Here's some of the advice provided.

What we tell financial advisers about women clients What women should take from this
Connect on a personal level Find someone with whom you have common ground (charitable work, kids education, health, skiing) who can talk to you about topics other than money.
Listen to her and what’s important to her Look for someone who asks questions about you and your life, and then listens carefully when you talk. Watch out for the adviser who continues with his or her own monologue once you stop talking
Understand how she connects with money (through her life goals) Look for someone who talks about investing in a way that connects to the things you find important (such as staying in your home, retirement, funding travel).
Reinforce her confidence (she’s knows more than she thinks) Look for someone who works with you to build your confidence and who can explain fees in a manner that is clear to you.
Speak her language (translate the pile of money into her life goals) Look for someone who does a good job of explaining things to you in plain language.
Respect her Look for someone who shows you respect as an individual, your schedule, your hopes and dreams.

Source: StrategyMarketing.ca

Speaking her language

Examples of how advisers can simplify investing jargon to make women clients more comfortable.

Jargon Sample plain language
Asset allocation We’ll develop a plan for investing in a number of different companies and markets in order to protect you from any one of them going down.
Dividend A payment a company makes to its shareholders. Dividends can be paid once or on a regular basis (monthly, quarterly, semi-annually or annually).
Investment Policy Statement An agreement between us about how we’ll invest your money – details of your goals, the types of investments we’ll buy, how often we’ll meet, how we’ll determine what we’ll buy, when we’ll sell. We’ll review this agreement if your goals change and make adjustments.
Management Expense Ratio (MER) All the expenses associated with running and selling a mutual fund – what the manager gets paid, the expenses associated with running the fund, and payments to the adviser and firm who sold you the fund.
Blue chip stocks The highest quality companies available.
Rate of return The profit you made on an investment since you’ve owned it based on how much it has gone up and the original price you paid for it.

Source: StrategyMarketing.ca

How to relate to women clients

Examples of how advisers can explain what they do in a way that resonates with women

Client questions Avoid this Try this
What you do? Investment management; insurance; financial, retirement, estate, tax planning I help people afford to do all the things in life they want to and help them achieve their goals.
How you do it? Customized to each client; investment screening process; value driven; sound research principles We work in partnership with clients. The first step is ensuring that we are on the same page when it comes to what’s important to them. That may sound easy but it’s usually the hardest part of the exercise.
Services you offer High level of communication; personal assessment, quarterly reporting, fee transparency I’m here for my clients and am always accountable. I do the heavy lifting and they live their lives.
Types of clients you work with High net worth; wealthy families; professionals; entrepreneurs I work with people I like and who like me. Some have money, others have time.

Source: StrategyMarketing.ca

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