Financial imperative for planners to understand women
Financial planning firms need to improve the way they connect with female clients, according to new US research.
The research, released by State Street's SPDR University, pointed out that currently women own 51.3 per cent of wealth in the US, with those assets amounting to more than $8 trillion and increasing to $22 trillion by 2020.
The research also pointed out that over the next 40 years, women were expected to inherit 70 per cent of the $41 trillion in inter-generational wealth transfers.
"Simply, with women wielding substantial economic power, if you are not comfortable and successful working with female clients, you may be putting your practice at risk," the SPDR University research said.
"Finally, the fact that boomer women — the wealthiest demographic most in need of retirement planning assistance — stand to inherit assets from their parents and outlive their husbands by an average of 15 years, underscores the long-term advantages of improving how you work with women," the research said.
According to psychology experts cited in the research, advisers need a better understanding of the way women think.
"The financial services industry prefers to treat all clients as gender neutral, even though there is clear evidence this is a mistake," wealth psychology expert Kathleen Burns Kingsbury said. "Due to factors from how women are raised to how the female brain is wired, women communicate, relate and learn
differently to men.
"Advisers need to appreciate these gender differences and tailor their approach in order to form trusting relationships with women," she said.
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