For Centuries, Men Have Been Seen as Family Financial Providers and Responsible for Finances
It’s only been since the mid-1970s that women have routinely worked outside the home, made their own money, and, therefore, could apply for their own credit. Over the past 50 years, gender roles have shifted, but unconscious gender bias remains. Many women are reluctant to negotiate their compensation because they’re often judged unfairly for doing so.3 They receive substantially less business funding from banks and venture capitalists.4 And they often downplay their breadwinning status to friends and families.
Women have greater access to financial planning and investment services for themselves, their partners, and their families than ever before. Unfortunately, money silence contributes to many women deferring to their partners or not attending meetings with financial professionals.5
Second, Women Pay a High Price for Not Speaking Up Financially
Many women face retirement-savings shortfalls, have less financial confidence and literacy, and defer their power to others. While they appear to be more empowered, 56% of millennial women ages 20 to 34 still defer their financial decisions to their spouses.6
To complicate matters, a large majority of women feel misunderstood by advisors and underserved by the financial-services industry. They view wealth holistically and want to work with professionals who are willing to discuss their feelings about money and who view them as people, not just potential assets under management.
Third, 5 Ways Advisors Can Break Money Silence
Because we live in a society in which money conversations are taboo, many women aren’t aware of how their mindset impacts their financial decisions and wellbeing. To help clients bring these attitudes into conscious awareness, have them complete a brief money-talk identification exercise.
Ask your client to complete the following sentences with the first thoughts or feelings that come to her mind:
- Talking about money with a partner, parent, or child is…
- Growing up in my family, talking about finances was…
- The easiest financial conversation for me to have is…
- The hardest financial conversation for me to have is…
- If I had more money conversations, my life would be…
Now spend a few minutes discussing her responses. What did she discover about her mindset? What surprised her? How does she think this mindset impacts her financial wellbeing? How can you help her improve her financial communication skills?
Gather Emotional Information
Gathering emotional data builds trust and provides insight into how a client perceives wealth, investing, and working with an advisor. It’s as valid as financial data, but often considered less important than the numbers.
Take time to ask about her family, values, career, and goals for the future. Listen more than you talk, asking clarifying questions to ensure that you understand what she’s sharing with you. If there’s a monetary stressor, factor it into your planning.
Gathering this information shows your women clients that you’re interested in their lives, not just their assets.
Host “Money Talk” Events
Plan a Money Talk event by inviting the women you’re trying to reach. Limit the number of participants to eight to 10 women. For example, if you’re targeting female entrepreneurs, then host an event for women business owners on the topic of negotiation. Consider inviting a compensation attorney and an executive coach to join you on a panel and demonstrate a team approach.
At the event, find out what they think about negotiating, how a money-talk mindset could impact their negotiations, and, ultimately, their success in business. Share how you can help them acquire negotiation skills and build wealth.
Don’t feel pressured to be the all-knowing expert. Instead, show up as a coach willing to listen and learn from everyone’s experiences.
Client events provide a unique opportunity for women to break money silence with each other and discuss their feelings about finance in a structured environment. Practicing financial communication skills is an important step toward talking more openly about their lives.
Show Your Human Side When Meeting With Prospects
The best time to show your human side is during the prospecting stage. Women typically hire advisors that take a holistic approach to wealth management. Take time to ask about her family, values, career, and goals for the future. Don’t use high-pressure sales tactics. Instead, invest time in building the relationship and answering all her questions about your services.
With existing clients, consider adding some of these inquiries into your annual meeting. Values, goals, and family circumstances change over time, so checking in on these areas of a client’s life periodically helps deepen the relationship.
Focus on the Less Involved Spouse
With clients who are couples, make a concerted effort to meet with both spouses and develop a better working relationship with the less-involved spouse. Invite both spouses or partners to all advisory meetings and copy the less-involved spouse or partner on all email communications. If one spouse is reluctant to participate in formal meetings, offer to meet for a cup of coffee instead. Ask about personal and professional interests, and focus on building rapport.
This is a great strategy for protecting your book of business during times of transition. Women have historically been the less-involved partners in couples, which explains why 70% of widows fire their advisor once their spouse dies.7
You May Be Thinking, “Why Worry About Money Silence? My Women Clients Seem Satisfied with Our Relationship.”
Your women clients may be satisfied with your current services, but revealing a little more of your human side can lead to better business results. KBK Wealth Connection surveyed 192 advisors, the majority of them with more than 16 years of experience, and asked how talking about the emotional aspects of finance influenced their client relationships and business growth.
Eighty-three percent reported these conversations solidified the advisor-client relationship. More than 77% of advisors reported improved client loyalty, 61% increased client referrals, and 57% increased assets under management.8
Luckily, a Friend Referred Rita to a Different Advisor
The new advisor understood the unique financial challenges faced by women in transition and the importance of empowering clients to talk openly about money. In the first meeting, the advisor asked Rita how it felt to manage the family finances alone and just listened.
Over time, Rita became more confident managing and investing money, and learned important skills for communicating about money with others. She has given multiple referrals to her advisor, stating, “I just want my friends to know that caring financial advisors do exist, and that it’s never too late to learn how to talk about money.” Advisors that empower women to break money silence and discuss the human side of finance have a competitive advantage over advisors that focus solely on the technical aspects of money management. Addressing the emotional aspects of finance allows you to understand your clients’ unique financial needs and concerns, and how you can provide the most value to her and her family today and for years to come.