It’s no secret that there’s a significant gender gap within financial services. While nearly half of all financial services employees are women, they occupy just 15 percent of the industry’s executive suites1 and comprise a mere 17 percent of US financial advisors.2
While the shortage of women in leadership and advisory positions is clear, often overlooked is the dearth of women clients.
Addressing the client gender gap
Women are an underserved segment, and that’s really a missed opportunity. While men might get most of the attention, studies show that women will control an increasing amount of the nation’s wealth in the coming years—both as breadwinners and as beneficiaries of wealth transfers.3
One way advisors can help develop a stronger relationship with their female clients is by personalizing their message—a critical strategy to help create and build trust.
While women might often think in terms of meeting financial goals and creating stability for their families, advisors might tend to zero in on performance metrics and beating benchmarks since they’re in the trenches of the financial services industry. Sometimes the two don’t mix.
Women tend to be more risk-averse than their male counterparts, which can create additional disconnects.4 What may sound like a sensible risk/reward tradeoff to one person can come off as rolling the dice to another. In some cases, it may just be a matter of fine-tuning semantics. It’s important to be mindful of communication style and clarity when working with all clients, and especially with underserved groups such as female investors, as people can often interpret things different, even if they’re trying to convey the same message.
Tips for recruiting female advisors
In many cases, the same stumbling blocks that might keep prospective female clients on the sidelines can come into play when recruiting women as advisors.
Here are some tips for firms looking to recruit more women advisors:
While there’s a long way to go in addressing the financial services gender gap, I believe the tides are bound to turn. Understanding women’s needs and their pain points isn’t about benevolence. The fact is that women will control a good share of the country’s wealth going forward, and it’s high time the financial services industry makes it a priority to implement initiatives to recruit more women advisors and target more female clients.
In other words, mind the gap.
A version of this article first appeared in WealthManagement.com