Are you missing out on one of the wealthiest populations set to control even more wealth in the coming years?

Last year, the number of female billionaires rose by 18% to 321, outpacing the 14.5% growth in the male billionaire population and increasing women’s share of the global billionaire population to 11.7%.1

That’s a global perspective, but If you don’t already know about the decision making and financial clout of women in the United States then a brief overview might be worthwhile. Here’s what some of the numbers look like in the U.S.

  • Women control 51%, or $14 trillion, of personal wealth in the U.S. and are expected to control $22 trillion by 2020.
  • They are the primary breadwinners in more than 40% of American households, a four-fold increase since 1960.
  • Women now hold the majority (52%) of management, professional and related positions in the U.S.
  • And they also own 30% of all private businesses, employing more than 7.8 million Americans.2

The demographics look good, right? But what about the level of professional services women experience with advisors?

Underserved

According to a 2015 study of 1,074 married, single, primary and sole breadwinners by the Family Wealth Advisors Council, breadwinner women (defined as women who contribute at least 25% to the household income and are responsible for up to 75% of all financial planning responsibilities) seek a wide range of services from their financial advisors, yet frequently don’t receive them.

That’s important to keep in mind given that in these areas, including charitable giving, paying for college, retirement planning and overall saving, breadwinner women are assuming 90% of financial planning responsibility.

What are women looking for?

Most women in the Family Wealth Advisors Council study indicated that coordination with other professionals like estate planning specialists, attorneys and accountants is important to them, yet more than 60% of advisors don’t offer a coordination service. Similarly, more than 85% of women said tax planning is very important to them, but only 57% said their financial advisor is providing it.3

Looking at the broader population, this profile in 2015 of Sallie Krawcheck, the former president of the Global Wealth & Investment Management division of Bank of America and current CEO and co-founder of Ellevest, included the following:

  • 86% of women say that the advisory profession is not serving them well whether they have an advisor or not;
  • The 66% of women who do have an advisor are unhappy with that person; and
  • 70% of women will leave their financial advisor within one year of their husband’s death.4

Improving Engagement

To improve their service and engagement with women, advisors can adapt to another set of beliefs, values and metrics. Krawcheck said risk should be a major focus, as women would rather keep large amounts of money in bank accounts than risk losing it through investments. Women focus on risk and value wealth preservation seven times more than they value upside gains, according to the Advisor Perspectives article.

There’s also a place for goals-based planning and investing. Being goal-oriented, women want to know how they can send their kids to college, afford their homes and retire well. Most women are not interested in many of the traditional metrics such as how portfolios did against the market, Krawcheck said.

Values-based investing is another important strategy advisors can adopt to better engage with women. Environmental, social and governance (ESG) investing, for example, offers women the ability to have a fair return and a positive impact through their investment decisions, she said in the Advisor Perspectives article.

Doing it Themselves

The number of women now in the financial advisory profession is growing, as is their influence, according to research recently published by InvestmentNews. Women hold 34% of all financial advisory roles and represent nearly 16% of the total universe of 298,000 brokers and advisers. Women also make up 23% of Certified Financial Planner designation holders, roughly the percentage level it was in 2003, but the ranks of female CFPs grew by 78% during that period to more than 18,000.5

This research also included interviews with 203 women and 288 men. It found that revenue generated by women between 2014 and 2017 grew by an average of 60% to $535,000, compared to 50% average growth for men to $440,000 over the same period. Embracing various marketing efforts, including social media, was cited as one of the drivers. According to the InvestmentNews research:

  • 51% of women said they use social media, compared to 33% of men.
  • Leveraging community involvement for referrals was a strategy of 48% of women and 42% of men.
  • And the use of public relations for marketing purposes was employed by 38% of women and 30% of men.

 

We provide fully-integrated marketing support—find out how Shurwest can help you better engage with your clients as well as attract your ideal clients in your target demographic group/s. Call us at 800.440.1088 to arrange a visit to Scottsdale.

 

1  “Female Billionaires Are on the Rise,” ThinkAdvisor, May 29, 2018. https://www.thinkadvisor.com/2018/05/29/female-billionaires-are-on-the-rise/ (accessed May 31, 2018).
 2 “BMO Report: Despite Controlling $14 Trillion in Wealth, American Women Still Have Challenges to Overcome,” BMO Financial Group, April 2, 2015. http://www.marketwired.com/press-release/bmo-report-despite-controlling-14-trillion-wealth-american-women-still-have-challenges-tsx-bmo-2006436.htm (accessed May 17, 2018).
3  “Women of Wealth \\ What Do Breadwinner Women Want?” Family Wealth Advisors Council, 2015. http://hemingtonwm.com/wp-content/uploads/FWAC-Women-Of-Wealth-Edition-3.pdf (accessed May 17, 2018).
 4 “Sallie Krawcheck’s Solution to the Retirement Crisis,” Advisor Perspectives, June 29, 2015. https://www.advisorperspectives.com/articles/2015/06/29/sallie-krawcheck-s-solution-to-the-retirement-crisis#page-3 (accessed May 31, 2018).
5  “Women advisers driving revenue growth,” InvestmentNews, May 29, 2018. http://www.investmentnews.com/article/20180529/FREE/180529917/women-advisers-driving-revenue-growth (accessed May 31, 2018).