In the world of investing, much has changed over the last few decades. As women find their own unique comfort levels with money and planning for their future, financial advisors must also shift to an approach that is approachable and accommodating to women.
DMJ Wealth Advisors Partner, Sheryl Austin, shares her perspective on women and investing.
In what ways can the investment world be intimidating to women? Most women view finances differently than men. To women, it is a means to accomplish their lifegoals. The details of underlying holdings, specifics of asset allocation, performance detail, etc. are not a focus for most women. Men have a tendency to want to boast about their “investment returns” while women typically are not having these conversations on the golf course, at book clubs, or other gatherings. What they are talking about is how much their advisor cares about them, the relationship they have with their advisor.
- Do Financial Advisors who are women have particular advantages in advising female clients? I do think that female Financial Advisors can have an advantage in working with female clients. Female advisors are more apt to engage in a conversation about the client’s family, friends, values – all of which are important aspects of their life’s goals. Female advisors can address the business of financial planning while focusing on the emotions of financial planning. Female Advisors are more likely to understand that female clients think of money in terms of what it allows them to do, this is emotion driven.
- What perspectives have you seen in your practice? In my practice, women look at their investments as a means to provide for their needs and wants. They typically will be more concerned about having enough or making a wrong decision about their investments that would have a long-term impact on their lifestyle. Many times, female clients do not want to focus on their financial plan. They have other priorities that demand their time and that they enjoy more than meeting with their financial advisor. Women may feel that because they do not want to hear about performance and market updates that they are not “intelligent’ enough or may appear ignorant in front of their advisor (and/or their husband). I tailor my meetings with clients to focus on the areas that are important to them. Helping them understand where they are, what risks might be in their plan, helping them make informed decisions by understanding the short term and long term impact to their plan. I don’t worry about going through a 20-minute market update, or details of performance if I know the client is going to glaze over during that presentation. While I have a responsibility to the client to keep them informed and provide financial advice that is appropriate for them, I also have a responsibility to keep them engaged in the meeting to allow for maximum takeaways.
- How do you deal with female clients in a way that’s respectful and makes them feel empowered? I will typically relate what I do and the knowledge that I have in this area to something that they do – that I don’t know anything about. Whether it is painting, photography or other hobbies, or professions, we all have an expertise in different areas, that doesn’t make me any smarter – just trained in a different area. Through our comprehensive financial planning, helping clients make informed decisions is easier. When we can illustrate for them certain decisions and the long-term impact – and real cost to their plan – they have the ability to make smarter, more informed decisions and that gives them confidence in their decisions.
- Where do we still need to go in terms of progress? By focusing on the client’s financial plan – and their ability to maintain their lifestyle even when portfolio performance is negative – or lower than historical expectations – we have been able to redirect the client experience to focus on their lifestyle goals. We make portfolio allocation changes because lifestyle goals or time horizons change, not because the market is reacting to the latest news.
How would you advise couples to prepare for discussions with their Financial Advisor to ensure that female spouses are encouraged to participate? We continue to encourage both spouses to come to meetings. In my meetings, I try to make sure that I am addressing both spouses equally with feedback from both parties and minimizing industry terminology, giving background data before we jump into a conversation on the market, economy, performance, etc. I ask the female spouse for specific information and send her an email asking for her thoughts on a certain part of the financial plan – that relates to her! I would advise her to engage in conversation during the meeting that she wants to talk about, and in return, provide positive support and feedback. I have several older female clients that often will, in a somewhat sheepish manner, say “I know this is a silly question, but . . .” It’s my place, my responsibility, to make her know (not just feel) that her question is very important because it helps me understand what matters to her most! To be my client is to be my friend. To accept who you are, what you need, what your passions are and to focus on those things. I cannot control what happens in the market or the economy, but I can control the emotional impact.
Advisory services offered through Investment Advisors, a division of ProEquities, Inc., a Registered Investment Advisor. Securities offered through ProEquities, Inc., a Registered Broker-Dealer, Member, FINRA & SIPC. DMJ and DMJ Wealth Advisors, LLC are independent of ProEquities, Inc.