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Fostering Financial Confidence in Your Female Clients
Tuesday, November 6, 2012
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Ninety percent of women report feeling insecure when it came to personal finance and 48% of women agree with the statement, “Investing is scary for me.” These statistics highlight the need for financial advisors working with women to foster financial confidence in their clients as part of the client engagement. 

Financial confidence is a mix of basic financial know-how, a can-do attitude, and a belief in one’s worth. It does not equate to making perfect decisions about money or always selecting the right investment. Financial confidence has more to do with trusting yourself to take some risks and knowing that you will mess up from time to time. It is learning what information you need to consider when making a financial decision and also how your personal values and money beliefs impact your choices. Financial confidence is not correlated with the amount of money you have, but with the comfort level you have in knowing you are doing your best every day to manage your finances.

Make sure you do not assume all women need this type of help.  Instead, carefully assess each client’s level of financial confidence to determine if this service is a fit. When appropriate, work with your female client to develop a plan of action that includes increasing concrete financial knowledge, money skills, and insight into financial attitudes and behaviors.

The ABCs of Fostering Financial Confidence is a model I use when working with a client to boost financial-esteem.  A stands for “Analyze,” B for “Build,” and C for “Coach.” Each step of this process is detailed below:

Analyze

The first step in the ABCs of Fostering Financial Confidence is to analyze your client’s current level of financial intelligence. Financial intelligence is the sum of your financial literacy, your money skills, and your ability to understand what you think and feel about money and wealth. When you have a higher level of financial intelligence, you typically have a higher level of financial confidence. Women with low money-esteem have a deficit when it comes to one or more of these areas—financial knowledge, skill, or insight. Your job is to find out where your client’s deficits lie and to develop a plan for building these areas.

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Build

The second step is “B,” which stands for building knowledge, skills, and insight through education, discussion, and support. After you have analyzed and dis- cussed the areas for improvement with your client, it is time for you and her to come up with an agreed-upon approach to increasing her confidence. Make sure you factor in her preferred learning style, and follow up with her regularly. Be as creative and collaborative as possible during the building phase because often clients have wonderful ideas on addressing their problems. The process of deciding together also enhances the advisor-client bond and shows your female client that you are invested in her taking care of herself financially.

When designing a plan, make sure to give your female client permission to take baby steps toward changing her relationship with money. Support taking small steps since setting up a plan that is too big can be overwhelming. The best route for long-term positive gains in financial intelligence and money-esteem is to build the blocks of confidence one brick at a time.

Coach

Coaching is a key element in building a woman’s financial confidence. As with all new things, it takes time and practice to integrate knowledge, skill, and insight into your life. Therefore, your female clients need your coaching and guidance along the way.

To be a good coach you need to be part cheerleader, part teacher, and part mentor. You need to hold her accountable for what she promises to do and examine what happens when she does not follow through. You need to be nonjudgmental, respectful, and accepting. At the same time, you need to challenge your female client to go beyond the status quo. Don’t give up if progress is slow. Change takes time, and a good coach appreciates this and makes space for his client’s imperfections in the learning and growing process.

As a knowledgeable financial advisor, you can boost your female client’s financial-esteem by using the ABCs of Fostering Financial Confidence in your practice. By supporting women in this way, not only will you foster increased financial confidence but you will also build trust and loyalty.  And women who are loyal to their financial advisors refer twice as much as men making this service certainly worth your time.

(1) Comment
I had this exact experience and approach with a female client recently.

She's a wonderful and candid person who said she was "too cheap" to hire a money manager for her $3 million portfolio. Instead she hired me to build an investment plan and teach her how to manage it herself.

When I presented the plan she admitted feeling overwhelmed with the responsibility, but not yet ready to ask someone else to take it on.

As her coach I really do have to give her space and time. That's great reinforcement of what I already sensed in my dealing with female clients.

Posted by ron g | Friday, December 07 2012 at 10:09AM ET
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