What women want – in a financial adviser
They look for quality products and services that live up to their standards, and an adviser who asks and answers questions
By: MARJO JOHNE
Date: October 18, 2016
Jane Nealon knows there’s a lot she doesn’t know about investing her money. But what she lacks in expertise she more than makes up for with dogged research skills and a willingness to ask questions.
“I don’t have a ton of knowledge when it comes to investing, but I do feel confident that I can research the different products out there and figure out why one might be better than the other,” says Ms. Nealon, a retired teacher who lives in Oakville, just west of Toronto. “I’m definitely the type of person who would purchase something, and if it’s not living up to what it was meant to do, I would not hesitate to return it.”
She was just as insistent on researching thoroughly and gauging for a certain standard of quality when she went hunting recently for a new financial adviser. In the end she chose an adviser who had the stamp of approval from a popular investing website, and who gave her a good vibe during their first meeting.
“I felt very comfortable with her,” says Mr. Nealon, adding that she didn’t go out looking for a female adviser. “And after our initial meeting, I went home and researched a good four or five hours over a couple of days and came up with more questions to ask her.”
Ms. Nealon’s take-control approach to investing – and insistence on financial products and services that live up to her standards – goes against the conventional wisdom about female investors. Numerous studies have suggested women lack confidence when it comes to investing their money, with many attributing this diffidence to a lack of knowledge about financial products as well as a prevalent belief among women that they don’t have enough cash to invest.
A recent study by United Capital Financial Life Management in Newport Beach, Calif., presents a different perspective. The study, which is based on a pool of more than 1,000 American women, found that none of the respondents considered herself to have low confidence – with her finances or other areas of life – and only 8 per cent felt frustrated by money problems.
About 90 per cent said they had high expectations for their lives and the people around them, and that they would sacrifice time, energy and money to make sure things are done right.
Jennifer Reynolds, president and chief executive officer of Women in Capital Markets, a Toronto-based national network of professional women in the Canadian capital markets industry, says she’s not surprised by the study’s findings.
“Women today are more highly educated and have more money – they control about 50 per cent of investable assets,” says Ms. Reynolds. “It’s an evolution for us, and we are taking charge of our investments and of our lives in general.”
Ms. Reynolds says most women, like Ms. Nealon, want to research their investment options thoroughly before making a decision. Financial professionals should be ready to answer their questions, and they will likely ask plenty of them.
“Financial advisers will need to spend that time with their female clients and be willing to answer their questions about their portfolio and the diversification of their portfolio,” says Ms. Reynolds. “It’s not that men don’t have questions, it’s just that women have a slightly different way of analyzing things. Perhaps we do this in a more linear fashion.”
Leony deGraaf, a certified financial planner and principal at deGraaf Financial Strategies in Burlington, agrees with United Capital’s findings about women’s confidence levels. Ms. deGraaf, who started working recently with Ms. Nealon, says she finds women to be confident investors.
But unlike many of their male counterparts, women tend to be less focused on numbers, particularly returns on investment. For them, investing is not about beating the market or demonstrating their ability to pick the winning stocks.
“Women, of course, also want to see their investments performing well but not because they’re going to be talking about it around the watercooler,” says Ms. deGraaf. “For women, it’s more about their investments doing well so they can meet their life goals, whether that’s being able to retire sooner and travel more, or getting to spend more time with the grandkids.”
Given their high standards and expectations, today’s female investors are likely to have little patience for advisers who talk down to them or make no effort to understand their needs, says Ms. deGraaf.
Vicki Saunders, founder of SheEO, a Toronto-based group that supports female-led ventures, agrees.
“I look for advisers who ask me questions instead of just talking at me,” she says. “They should be asking me what my goals are and they should listen to my answers, instead of just rushing to put me into mutual funds or whatever other products they have on their checklist.”
So what happens when advisers fail to meet the needs of their female clients? The United Capital study suggests that, because women hold such high standards, they often feel they have to do everything themselves. This isn’t such a great idea within the context of investing, says Ms. deGraaf.
Ms. Nealon certainly didn’t feel up to the task of looking after her own investments. While she was feeling less than satisfied with her previous adviser, the idea of flying solo with her portfolio never crossed her mind.
“I want to be more actively involved in my portfolio today than I ever was in the past,” she says. “But while I’m confident in my ability to research anything that Leony presents me with, I am not an expert and I do rely heavily on her advice.”
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