"Go long on women for profits" states a study released late last year by Bank of America. If you're an advisor, take heed of this advice.
By going long on women, you will follow the money. The financial future is looking brighter for women than for their male counterparts. Just look at the following statistics from marketguardian.com.
• Women didn't experience the severity of the labor market recession that men did. The unemployment rate for women is almost two percentage points below men.
• Three women graduate from college for every two men. In fact, women earned over 50% of the Bachelor's degrees in the past decade, compared with 40% in 1960.
• Women make up the majority of the workforce in nine of the 10 occupations the Bureau of Labor Statistics predicts will add the most jobs in the next eight years.
• The number of women-owned firms continues to grow at twice the rate of all U.S. firms.
In addition, women's general attitudes and financial needs tend to be more in line with an advisory service model than men's.
However, a 2010 Prudential study reports that less than 20% of women feel very prepared to make financial decisions. Most feel they need some help; 30% say they need a lot of help.
But the bottom line is that women represent a great opportunity for growth within the financial services segment. However, a 2009 study by the Boston Consulting Group, indicates that women who currently work with advisors have high levels of dissatisfaction. Affluent women stay in a financial relationship for an average of five years, and a woman stays with her advisor after becoming a widow for an average of less than one year.
To ensure that you participate in this opportunity, it is imperative to understand what women want, which can be summed up in one word: relationship. Studies show that intrapersonal, relationship-driven factors are key to overall satisfaction.
It's often not immediately apparent that you relate differently than women expect you to. That's because it may be related to neurological differences between the genders. Various studies show that male and female brains work differently. Women tend to use both the left and right sides of their brains at the same time, while men tend to use one or the other. Scientists believe that this may be because the corpus callosum, the network of nerve connections between the two sides of the brain, is larger in women.
The net result is that males and females tend to process information and communicate differently, which can lead to miscommunication and misinterpretation. Thus the secret to success is to be aware of these differences and the misunderstandings that they may cause. Let's look at three of the most applicable areas of communication to an investment advisory relationship.
One key difference is how men and women show signs of listening. Men sit quietly, paying attention without moving much, just seemingly focused. Women actively participate by nodding along and make agreeable noises, saying "yes" or "uh-huh."
The misunderstanding is almost comical. Men think women are agreeing with them when women are only showing that they are following the conversation. Women think men are not listening or are bored with the conversation because they're not engaged. Think back to a prospect meeting, did you think that the prospect was agreeing with you through the conversation but not agreeable at the close?
Don't assume that nodding means yes. Check in with her along the way to see how she is tracking your conversation. Furthermore, when your prospect is talking, you may want to interject occasionally or nod yourself.
Another example is the different way men and women interpret the question: "What do you think?" To men, this as a call to action. They feel they are being challenged to take a position, make a statement or deliver a decision, so when they answer, they try to deliver something definitive. They give their bottom line and then move on. Women hear this question as an invitation to express their thoughts and feelings about a topic or an issue.
Again think back to a meeting with a female client that didn't go well. Did you give her a definitive answer to her question, only for her to want to talk more? Did you get frustrated when she seemed to go on in answering your question? Could your client have felt that you were dismissing her? I can't tell you how many times I've heard that complaint in my travels. The question requires a discussion, not just a definitive answer and/or action.
A third important difference between the sexes is in how men and women answer the question: "The best way to convince me is..." Men will say, by supporting your argument with facts, figures and careful logic. Women will say by supporting your argument with personal experience and the experience of others, as well as facts, figures and careful logic.
The misunderstanding here is that investment performance alone is not enough of a source of satisfaction. It has to be related back to who the woman is and what she wants. Therefore telling stories, giving anecdotes and examples are critical. Appropriate storytelling is a must.
It will also help you capture the female market if you can identify the signs or "tells" of disaffection typically evidenced by facial expressions and/or body language. Some of the more common tells and their respective meanings are:
Blocking their eyes: They didn't like what they just heard
Nose crinkling: Unpleasant thought
Lip pursing: Unhappiness
Compressed lips: Stress
Neck touching: A lack of confidence
Interlaced hands: Unease
Unfortunately for men, reading these tells may not be as easy as it seems. Tests show that men have more difficulty understanding what a certain facial expression means on a woman's face than on a man's. Compared with men, women identify people's emotions without even trying and are likely to read emotions even before they listen to what people say.
A great example of this is that for men, "I'm doing fine" means just that—fine—even if the person who says it is frowning. For women, it's the frown that counts.
In addition to reading a woman's tells, be aware of your own tells. Think about what your face looks like when your client or prospect is talking more than you would like. What do you do when they want to discuss issues after you have given them a definitive solution? Does your face and body language show your frustration? Most likely it does—you are human after all. The best way to adjust for these tells is by having self-awareness.
This isn't always easy, so try asking your partner, spouse and close clients what they think your tells are, and try to adjust accordingly. In addition, manage your own expectations. Remember that just because you're giving an answer doesn't mean the conversation is closed. Let the client talk and really listen for rational concerns or irrational fears. Often the client doesn't really know what's bothering them. Write down concerns as you hear them and reflect them back to the client to get the conversation focused and handle the objections appropriately.
It takes a lot of self-awareness to make note of your tells, and many advisors may not find this easy.
The key to success in the women's market is awareness and preparation. Before you have a meeting with a client or prospect take 10 minutes and think about your style. Your style may need to flex to be more in line with what attracts this $1 trillion marketplace.
Susan Hirshman, CFP, CPA, is president of SHE Ltd., a consulting firm focused on enhancing the financial literacy of women globally. Visit www.myfatassets.com for more information.