Are advisors ready for the tidal wave of women-controlled wealth?

My career in wealth management has its roots in 1997, when I witnessed the start of a quiet revolution through my own mother's experience. Widowed at 52, she faced a financial services industry ill-equipped to support her. She found herself dismissed by advisors who prioritized product over her needs. Their blatant disregard fueled my passion to empower women like her, ensuring they navigated finance with confidence and control.

Fast forward to today, and the landscape has been changed for the better. Gone are the days of women investors as passive players. Women are in the process of claiming an estimated $30 trillion of baby boomer wealth, propelling millions of women into financial decision-making roles. 

I see this not only among my widowed and divorced female clients who aim to take charge of their finances, but also among the increasing number of women in leadership and executive roles. I see it with millennial couples who share investment burdens and in which the woman plays an equal or greater role in the couple's finances. 

Yet, despite this undeniable shift, many financial firms and advisors remain stuck in the past. 

The old playbook, built for a different era, ignores a fundamental truth I've gleaned from years working with these remarkable clients: Women invest differently. Unlike their male counterparts, women investors prioritize the "why" in their investments before the "how" and the "what." Their discussions revolve around achieving specific goals, be it securing their children's future, buying or building a dream home, saving for retirement or achieving financial independence. 

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Particularly given the current popularity of the passive investment approach, many women investors focus on matters they believe they can control, such as budgets, spending and savings. I find women rarely lead with investment options. Instead, they focus on the areas where they can control and make an impact. It's the advisor's job to empower them to take control of the controllable.

Bedrock of trust

My interactions with female clients transcend the transactional. We discuss families, aspirations and life dreams. These deep connections foster trust and understanding, creating a bond that transcends market fluctuations. This trust is the bedrock on which sound financial decisions are built. 

For example, one female client hired me because we spoke in-depth about her hopes, dreams, concerns and even conflicts within her family. While I offered to take her out for a meal, she preferred informal chats to catch up and share life updates. She valued my listening ear and understanding over fancy dinners.

While women seek guidance, they also yearn for financial autonomy. My role in this regard is not to dictate but to educate. I break down financial jargon, simplify complex concepts and equip them with the knowledge to make informed choices. With one divorced client who found tax jargon daunting, I didn't just pass her along to a CPA; I worked with her for two years running, helping her complete her tax questionnaire line by line, explaining each question and building her confidence. By the third year, she completed it independently, feeling empowered and accomplished.

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Women advising women

The rise of the women investor is not a trend; it's a tidal wave about to happen. Financial firms and advisors must adapt or fall behind. They must build diverse, female-led teams that understand the unique needs and perspectives of women investors. These teams should extend beyond the firm and encompass a network of female therapists, bankers, mortgage brokers, CPAs, real estate agents, etc. 

Firms must also adopt goal-oriented financial planning strategies and tools that stress personal aspirations alongside investment strategies. Ditch the Monte Carlo scenarios and 20-page reports; women want tangible, consultative advice on reaching their goals. How much should I save for retirement? Do I have enough insurance? How much will my children need for college? Women have too much on their plate to focus on the details that do not matter and will demand bottom-line strategies on how to get to where they need to be. 

Firms must create educational resources that empower women and foster confidence and independence. When women clients utter apologetic phrases such as "I am sorry to ask you such silly questions," "I am embarrassed, but I do not know what this means" or "You probably work with more savvy investors," please do not take these statements as an invitation to bulldoze your way through conversations or interpret them to mean women "need saving." Instead, use this as an opportunity to educate and empower, allowing them to feel confident with their decisions. 

The wealth management world stands at a crossroads. Those firms and advisors who embrace the women investor wave will thrive, forging lasting relationships built on trust, empowerment and shared success. Those who cling to outdated models will find themselves washed away by the tides of change.