How gender demographics are tilting wealth management toward women

With women expected to add tens of trillions of dollars to their wealth by 2030, the industry must change to serve them, according to a panel of financial advisors and other experts.

The current low representation of women in the financial advisor profession, typical language that doesn't speak to female clients' values and a misunderstanding of demographics could threaten wealth management firms' capacity to serve their clients in the future, panelists said in a session at this week's Future Proof conference.  

For example, the concern that many clients may outlive their wealth carries a disproportionate impact on women, noted Ashley Bleckner, a private wealth advisor with New York-based registered investment advisory firm for women Ellevest — which is led by former Citi and Merrill Lynch executive Sallie Krawcheck.

"Her whole concept was that the retirement crisis is a women's crisis," Bleckner said. "We live longer. We take career breaks for aging parents and children. Unfortunately, our incomes peak sooner. And so, instead of just trying to have women fit this mold — have women change to fit into an industry that's been built by men for men — the idea is that we want to change the industry. We want to create something that is supporting women and honoring their differences."

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Doing so doesn't reduce or eliminate the role of men, noted Blair duQuesnay, a lead advisor with New York-based RIA firm Ritholtz Wealth Management and the creator of The Belle Curve blog

"One of my favorite things that I ever heard Warren Buffett say was, think about all the success that we've had in our economy in the United States, and how, for most of that history, we did that with half of our population, right? The men," she said. "And so it's only in the last few decades that women have been coming into the professions, and that's actually exciting. It's not at the expense of anyone. It's just adding to it."

That influx could create more ways to focus on women as clients. Behavioral finance tools such as a card game called Money Habitudes or quizzes by DataPoints can unlock different types of conversations than the traditional ones between advisors and clients, according to Cary Carbonaro, a managing wealth advisor and the women and wealth ambassador with Scottsdale, Arizona-based Ashton Thomas Private Wealth.

"If I'm going to meet a woman, I want to get inside her psyche, and I want to use these behavioral finance tools. And women love them," Carbonaro said. "It really makes them feel at ease, makes them feel comfortable, makes them feel seen and heard, and it's just so easy to get to know your clients with behavioral finance tools."

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Shifting demographics will also alter the makeup of the client base across wealth management in the future, according to panelists. In particular, rising divorce rates and the large proportion of women who are widows are forcing adjustments to advisors' books of business, said Laura Combs, an executive managing director with Denver-based RIA aggregator Mercer Advisors.

"We have this gray divorce area where we're seeing a lot more women who have maybe earned money with their husband, with their spouse, that are now divorced at a later age and needing to manage and control that. That's going to be a huge piece," Combs said. "Women are losing their spouses earlier and earlier. We live, generally, on average, five years longer than men. And so there's this huge opportunity for, really, men and women advisors to take great care of their female clients well."