Today, women make most financial decisions affecting their households. The vast majority are gender-neutral about choosing an advisor. And they represent an exceptional sales opportunity for advisors—both men and women.
If you're seeing dollar signs, then the source of these statements, Michael Ross, has potentially a new convert to an urgent message: that advisors, most especially men in the business, must better orient their practices to the burgeoning insurance and financial service needs of women. Ross, a 20-year industry veteran and an advisor or with Cornerstone Financial Group, conveyed his plea during an afternoon Focus Session, "Women: One of Your Wealthiest Market Segments," of the Million Dollar Round Table's 2015 annual meeting, being held in New Orleans through Wednesday.
Citing a 2012 white paper, Ross said financial services professionals have long viewed women as a "secondary" or "niche" market. Key reason: The traditionally domestic role that women held in the first half of 20th century America.
"Back then 57 percent of women said that they were raised to believe that a man would take care of them," said Michael. "Only 3 percent believe that today. Old habits and cultural behaviors are very slow to change, and that has certainly been the case in our industry."
He added that women have historically been underserved because many of them weren't interested or felt uncomfortable in meetings with advisors. If they did participate, they oftentimes were ignored, the advisor assuming that the husband made all key financial decisions for the household.
Much has changed. Today, women represent a significant sales opportunity, in part because of the "exceptional benefits" of serving women.
Women, he noted, make nearly twice as many referrals as men — to friends, family members and others — because "they feel responsible to help those they care about." Women are also "the gateway" to the next generation because they tend to survive their husbands.
"They inherit from their husbands and they rely on a trusted advisor, as well as family and friends, to get them through those first few rough years," said Ross. "If you are that trusted advisor, you'll likely interact with her adult children.
"If you do a great job for Mom, you're in a good position to work with them too," he added. "Many advisors forget this and wrongly look past the widow and right to the adult children."
Ross noted also that women are financial decision makers for themselves and their families. Their growing financial power is reflected in numerous statistics. Among others, he notes that women:
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open 89 percent of all new bank accounts and pay 85 percent of all bills.
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make 80 to 90 percent of all financial decisions for their households.
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buy more than half of new cars and influence 80 percent of automobile purchases; and
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influence 91 percent of all home purchases.
All impressive statistics. But to effectively serve women, said Ross, advisors have to articulate financial information without jargon and without condescending to them.
