This is the first in a two-part series on the importance of serving women clients in a compliant and effective manner. This column focuses on the common mistakes advisors make while serving female clients while the next column, which will be published on Dec. 14, will explore the specific issues relating to women clients approaching, or at, their senior years.
The financial services sector, in general, and advisors, in particular, are finally opening their eyes to the importance of serving women clients. However, they also need to recognize the importance of serving women clients the right way.
As an example of this emerging trend, I recently saw a full-page advertisement with a huge illustration depicting a woman client with a male investment advisor working on a laptop perched on her shoulder. Although most people would just pass this full-page ad by without much notice, it provides confirmation that securities dealers are finally waking up to the substantial wealth that Canadian women control, which is reported to be around $3.2 trillion, according to recent research from Investor Economics Inc.
I have often referred to women clients who, in the past, have been ignored by their male advisors as “invisible clients.” So, it’s important for advisors who are attempting to serve women for the first time to become aware of the following common mistakes associated with serving women clients:
1. Don’t paint all women with the same brush.
Each woman you meet is different; even if they’re from the same generation, women are not a homogeneous group. Therefore, the importance of knowing your client, every client, and each client’s attitude toward risk, is very important.
2. If a woman is in your office with her husband, don’t treat her as if she’s invisible and address only her husband.
This is a huge mistake because of two important statistics: According to recent research commissioned by Toronto-Dominion bank, 90% of Canadian women will have total control over their finances at some point in their lives; in addition, a recent report from the Boston Consulting Group suggests that one-third of North American women earn more than their husbands.
So, if you treat her like the “little woman” and she leaves the meeting with that feeling, be prepared to receive transfer out papers directing the accounts to another advisor.
3. Women do not like to be spoken to in a patronizing fashion.
Just because a woman client is inexperienced or not specifically knowledgeable in the area of financial matters, this does not mean she is an idiot and should be spoken to as such.
If you’re a male advisor not used to working with women clients and are inclined to speak to them in a manner that leads women clients to feel like they’re being talked down to, you should expect that they will be moving their money from you faster than you can say “KYC.”
So, explain a product — and especially the risks related to that product — at your woman client’s level of understanding so that she knows what she’s buying. Women of wealth will have resources to sue — and people sue when they are surprised. Avoid surprising these clients by teaching them about products in a respectful manner and be transparent with the fees involved.
Overall, you need to ensure that you are authentic and credible. Women can sniff out an advisor who is not authentic or is giving them a line or two. I suggest that if you are not used to serving women clients you should spend some time reading some of the many books and articles written on this topic.
In the book Never Be Closing, which is about selling in general, authors Tim Hurson and Tim Dunne state that unless you understand people, you will never understand the selling. So, take the time to understand each woman client; only then will you understand how to serve her properly.