Despite the need for good financial guidance, there is a disconnect between female investors and the advisor community. What makes the investment experience different for women? We believe there are two major barriers standing in the way:

  1. Outdated stereotypes that distract advisors from the real issues.
  2. Unique challenges that affect wealth creation and preservation.

As an industry, we’ve made little progress in lowering these two hurdles. The effort to better serve female clients has, regrettably, often focused on comparing men and women. This tends to perpetuate stereotypes. Even more damaging, it overlooks the individual needs and characteristics of female investors. Gender differences are an important underlying factor, but focusing on the differences only distracts from the goal of better serving these clients.

For example, conventional wisdom says that women are less confident than men and that this manifests in their investing skills. Yet painting female investors with such a broad brush ignores important variables. Confidence in investing skills is strongly influenced by other factors such as age, education and experience.

Focus on what matters most

Female investors have substantial and growing economic power and financial influence, but they often face unique challenges that impact their ability to build and preserve wealth:

  • Gaps in the workplace to care for family;
  • Greater longevity risk;
  • Higher costs for healthcare, long-term care, and retirement.

These are related and even compounding issues. Less time on the job contributes to lower lifetime earnings, which means less money devoted to retirement savings; longer lifespans can mean higher expenses for healthcare and long-term care. This also affects the type and amount of risk that women need to budget in order to meet their goals. For example, a small capital loss can be devastating if it’s followed by a period of lower income due to family responsibilities—but excessive risk aversion increases the likelihood of outliving retirement savings.

Partnering with female clients requires a true understanding of their challenges and goals. So how can advisors leap over the hurdles to truly help?

Be her advocate

Help break down the stereotypes by showing that you as an advisor understand her. We need to comprehend this client’s relationship with money and play to her strengths—her long-term perspective fuels her motivation and supports a healthy investment style. Remember: the female investor isn’t necessarily less confident, but it’s more likely that she makes decisions in a different way; provide her with additional education to help her find the best decision. She might be more risk averse, but also needs to meet a potentially longer-term goal; help her find the right balance between risks taken and a longer timeline and potentially lower earnings. Educate around money concepts when necessary and frame decisions in a relative context to help her become a more effective and knowledgeable investor.

Prove your worth

Saying you provide value isn’t enough. You have to prove it. Demonstrate your ability to listen, understand and respond to her needs. Outline how this is fully integrated within the relationship experience and the approach to planning. Performance matters, but it’s not just about beating the benchmark. Female investors are looking for solutions that address their financial goals.

Women may have some common challenges in how they build and preserve wealth, but each individual client brings a unique perspective and set of circumstances to the investment experience. Greater awareness of these shared characteristics and unique differences will bring a sharper focus to individualized planning and, ultimately, better outcomes for all clients.

To learn more about reaching and retaining female investors, read our full report, Closing the Gender Gap of Advice.