Editor’s Note: This is the first installment of a new feature, “Strategic Partner Corner,” which is intended as a means for professionals from NTSA strategic partners to share their insights and experience. It will appear occasionally in The NTSA Advisor.
Financial professionals should understand and prioritize the issues, questions and challenges women face to help them build long-lasting relationships and attract new clients.
Women control about one third of the financial assets in the United States, about $10 trillion. By 2030, they are projected to control about $30 trillion in baby boomer financial assets acquired on their own and as beneficiaries of parents and spouses [1].
Security Benefit recently sponsored a Life Insurance Marketing and Research (LIMRA) study that surveyed women ages 25 to 70 about their retirement savings considerations and factors that influenced their willingness to use a financial professional to address them. Respondents included affluent women, mature women, sole parents, stay-at-home moms, and young professionals, all of whom had household income greater than $35,000, played a role in making financial decisions in their households, and sought or reviewed product information in the past year.
“What Women Want in Financial Services” found five concerns trending among all segments:
1. managing debt (credit cards, student loans)
2. saving for retirement
3. compensating for unexpected expenses and inflation
4. ensuring my family will be financially secure if I die or my partner does
5. outliving my savings in retirement
Large proportions of respondents want help to secure their financial future but believe they can’t afford professional advice and don’t know what products they need. The top four activities that women want assistance with include:
- retirement planning
- investment management
- comprehensive financial planning
- tax advice
The study noted a strong correlation between having a financial plan that documents long-term goals and working with an advisor. However, across all segments “strongly and consistently the #1 most cited reason for not using a financial professional was the perception of cost.” Other factors cited that hinder seeking a financial professional’s services include:
- a belief that the individual doesn’t have enough money to need one or doesn’t have enough money for a financial professional to be interested; and
- not knowing how to find someone.
- In developing a relationship with a financial professional, respondents are looking for advisors who are willing to:
- educate and explain;
- listen;
- communicate regularly; and
- be transparent about compensation.
Leveraging These Insights: A Mindful Approach Is Key
Being mindful about what women want in financial services across all age groups is critical to building and sustaining a practice, especially in the coming years when baby boomers are expected to transfer about $68 trillion in assets to beneficiaries.[2] However, it’s important to understand the nuances. Women aren’t asking for a firm’s website to be covered in pink and geared toward them. The responses don’t indicate a request for special financial services; they want a holistic approach to financial wellness that’s built on transparency and clarity.
For many women, establishing a trusting relationship with a financial professional is on a par with a solid plan. About 70% of widowed women fire their financial professional within a year of a spouse’s death not because of the financial plan’s performance or portfolio composition but because they feel ignored or disrespected and lack rapport with the advisor. In conversations, male and female financial professionals alike tend to focus on males when meeting with couples about 60% of the time, a miscalculation that can cost them [3].
The Bottom Line
While professional expertise and money management prowess are essential in helping women reach their retirement savings goals, engaging them in meaningful conversations can complement a holistic approach that demonstrates concern for both financial and emotional well-being. Simple things like sharing memories about a deceased loved one, sending cards, and making an effort to connect for various milestone events can make clients more satisfied with their savings efforts and more receptive to guidance in achieving a confident, comfortable retirement.
Footnotes
[1] https://www.morganstanley.com/articles/female-invest-women-and-wealth
[2] https://www.cnbc.com/2022/12/09/great-wealth-transfer-why-millennials-may-inherit-less-than-expected.html#:~:text=On%20the%20cusp%20of%20the,trillion%20on%20to%20their%20children
[3] https://www.fa-mag.com/news/don-t-give-female-clients-reason-to-leave-69978.html
Jackie Morales is COO of Security Benefit.
Opinions expressed are those of the author, and do not necessarily reflect the views of the NTSA or its members.
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