The honest truth about what women want from advisors

To female clients, focus on returns can’t make up for failures in communication and understanding

The honest truth about what women want from advisors

In the wake of International Women’s Day, many advisors should be getting timely reminders of all the reasons why wooing female clients is essential. An increasing number of women are acting as breadwinners in their households — 30% today, up from 18% in the 1980s — and as more women set to benefit from a transfer of wealth, even more of them will become major financial decision-makers and asset owners, with nearly half of the financial wealth in Canada said to be in their hands by 2026.

But even when faced with those facts, a lot still don’t get it: among women looking for an advisor, 87% said they can’t find one they connect with. Similarly, a reported 80% of Canadian women switch advisors within one year after their spouse passes away.

“Women aren’t feeling heard,” said Dilys D’Cruz, vice president and head of Meridian Wealth. “This is what we’re seeing in the stats and the surveys out there.”

Male or female advisor? It doesn’t matter

Estimating that advisors are twice as likely to approach a man than a woman, D’Cruz said that more advisors have to work on how they interact and connect with female clients. From a broadstrokes perspective, she said men tend to be outcome-oriented, focusing on rates of return and portfolio performance. Advisors who take that same approach with a woman, however, shouldn’t expect it to be effective.

“Women want results too, but they really want advisors who listen and understand where they want to go,” she said. “Statistics show that 97% of women don’t care whether they have a male or a female advisor. It’s about them being able to go beyond ‘How are you going to make sure I make money?’”

Focusing on financial product performance might be tempting, as it can keep discussions more simple and straight-to-the point. But as D’Cruz points out, product has become commoditized; advisors need to differentiate themselves, which they can do by showing that they care. That means knowing what’s important to a client and having a firm grasp of all aspects of their life.

“I think advisors who come to clients with the old-school mindset of presenting their value strictly based on rates of return are going to lose,” she said. “In my view, IQ is table stakes in this industry; that’s what helps you get accredited, understand the market, and understand the products you offer. If everybody has that, EQ is going to be your differentiator.”

Some advisors might want to double down on the IQ side by going through the brass tacks of their investment strategy and using technical jargon. But D’Cruz maintains that those displays of braggadocio are more likely to be counterproductive to female clients searching for understanding and collaboration in their advisory relationship.

Create a bigger conversation

“Advisors also have to be careful of being dismissive,” she added. “If you’re working with a couple, you have to ask: am I bringing both the husband and the wife, or spouse, or partner into the conversation? Am I speaking to them? If not, it’s a deal breaker.”

Why are some advisors more comfortable speaking to male clients than female clients? It might be because of a gender bias, or it could be just an innocent preference to speak in the male language of returns and performance. But whatever the case, advisors who shut women out will have to re-examine and shift their approach.

“Enhancing the relationship is really what matters, and that includes creating a space where the person can be vulnerable and share things that concern them,” D’Cruz said. “You can open up room for them to discuss bad experiences they might have had, or even ask ‘How are you feeling about our relationship?’ Because things might seem fine, but one day out of the blue you get a transfer request, and it’s only in the post-mortem that you see there’s a disconnect.”

A lot of advisory relationships are likely hanging in the balance right now. The past month has been a busy one for Canada’s financial advisors as the usual crush from RRSP season and tax season coincided with the worst turbulence the financial market has faced since 2009. With all these issues converging, many clients are asking questions and seeking reassurance from their advisors — and the more silence and non-answers they get, the more soul-searching they’ll do.

“When the tone set for advisory conversations is entirely results-driven, you might be getting good returns for the client, but they could still have other reasons to feel unhappy with you,” D’Cruz said. “When the markets start going down and getting volatile as they are now, they’ll look deep down and say ‘What is my advisor doing for me? How happy am I with them? And are they making me feel secure through this volatile situation?’”