Advisors can do more to engage women investors in long-term financial
planning conversations; possible benefits include increased client
satisfaction, consolidated assets and new referrals
The study, conducted by
In addition to being loyal to their advisors, the findings suggest that women investors are more likely than men to focus on longer-term planning issues, which can align well with an advisory relationship. More than half (56%) of advisors said that they believe that their female clients have a longer-term perspective when it comes to planning, versus only 5% who say male clients take a longer-term view.
“Undoubtedly, women are an attractive target client segment for financial advisors given their growing economic power. They can be predisposed to take a longer-term perspective, are assuming greater responsibility for investing decisions and value tailored guidance from an advisor,” said
The study found that a significant portion or women (54% Generation X and 64% Silent Generation) said they have recommended their advisors to a friend or family member.
Women taking an active role in investing decisions but lack confidence
More than half of respondents (52% Generation X and 63% Silent Generation) share the responsibility for managing their households’ savings and investments and nearly one third (29%) of Generation X and one quarter (24%) of Silent Generation women have even more responsibility than their partners. The advisors surveyed also said that, on average, half the households they serve are led by female decision-makers.
Despite their increasingly active role in financial decision-making, women are not particularly confident about their investing knowledge. More than half (52%) of Generation X women and more than a third (35%) of Silent Generation women stated they are “a little” or “not at all” knowledgeable about investing.
“Nine in 10 women will manage their financial assets on their own at some point in their lifetimes.2 For many women, understanding this fact dramatically impacts how they approach financial decision-making and investing,” said Howard. “Financial advisors have an opportunity to engage female clients in building up the investment knowledge and confidence they need to effectively manage their progress toward financial security.”
The qualities and offerings women find most important in a financial advisor
Active listening skills were overwhelmingly cited (by 86% of Generation X and 87% of Silent Generation women) as the most important factor to a successful and lasting relationship with their advisors.
However, the two generations diverged somewhat when asked about specific drivers for satisfaction with their financial advisors. For Generation X women, the strongest drivers of overall satisfaction are an advisor’s ability to provide effective recommendations tied to their concerns, adapt explanations to their level of knowledge and explain how decisions may affect them differently in the future. For Silent Generation women, providing personal service and establishing a personal connection outside the business relationship rank as the strongest drivers of satisfaction.
“Most women want to understand their investment portfolios, but beyond that they want meaningful discussions with their advisors that tie the numbers to actual goals and help build a trusted relationship,” said Howard. “Advisors should use every meeting with a client as an opportunity to educate and engage them around their financial and personal objectives, and demonstrate that they are incorporating these goals into their financial plan.”
Where female investors need more from their financial advisors
Despite their focus on the long-term, many women in both age groups said they don’t have or don’t want a formal plan for how to accumulate money or generate income in retirement. Additionally, when advisors were asked to assess the importance to female clients of various services and solutions that they provide, advisors ranked preparing a formal financial plan relatively low, although planning-related conversations were rated high on the list.
In addition, only 27% of Generation X and 36% of Silent Generation women feel their advisors know everything about their financial goals and concerns, an attribute that correlated strongly with respondents’ overall satisfaction with their advisors.
“Expanding relationships with women investors may represent advisors’ most important business growth opportunity. Our study suggests that advisors can do more to fully involve female clients in a formal planning process, which we believe is a vital part of ensuring financial security,” said Howard. “Central to that effort is ensuring that advisors understand their clients’ goals and deliver a clear plan to help clients make effective financial decisions.”
Russell has worked with many distribution partners and financial advisors on the subject of creating better conversations and engagement with investors. In 2014, Russell plans to introduce the next evolution of its offering to help financial advisors deliver a superior client experience and better outcomes for investors through a process of effective decision-making.
For more information, download the What Really Matters to
About the What Really Matters to
The advisor survey includes the results of 343 respondents, while the women investor survey includes 901 individuals (501 Gen X and 400 Silent Generation). In order to qualify for the study, women investors were required to have at least
For advisors to participate, they were required to be employed as an independent financial advisor, planner, or RIA, or work for a wirehouse or national firm, regional broker dealer, or independent broker dealer for 3 years or longer. They also needed to generate at least 75% of their business from the sale of individual products and services and earn at least
About Russell Investments
Russell Investments (Russell) is a global asset manager and one of only a few firms that offers actively managed multi-asset portfolios and services that include advice, investments and implementation. Russell stands with institutional investors, financial advisors and individuals working with their advisors—using the firm’s core capabilities that extend across capital market insights, manager research, portfolio construction, portfolio implementation and indexes to help each achieve their desired investment outcomes.
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*includes more than
Nothing contained in this material is intended to constitute legal, tax, securities, or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type. The general information contained in this publication should not be acted upon without obtaining specific legal, tax, and investment advice from a licensed professional.
The information contained herein has been obtained from sources that we believe to be reliable, but its accuracy and completeness cannot be guaranteed. The information, analysis and opinions expressed herein result from surveys of persons outside Russell Investments and may not represent the opinion of Russell Investments, its affiliates or subsidiaries. This report is provided for general information only and is not intended to provide specific advice or recommendations for any individual or entity.
This is not an offer, solicitation, or recommendation to purchase any security or the services of any organization.
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1 “Women, Money and Power.”
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Source: Russell Investments
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