One of the most significant and ever-present challenges facing the financial industry is the insufficiency of retaining female clients after they experience the loss of their husbands or partners. According to Thrivent, 70% of women leave their financial advisor within the year of their spouse's death.
While we understand the need for those experiencing loss to connect with their financial advisors in a timely manner, identifying and rectifying the root cause of this drawback is even more important.
In my experience, three core issues prompt women to leave their advisors after this pivotal event:
- The husband or partner typically handled the financial relationships.
- Men in the financial industry tend to relate more to the husband, leaving women to feel a lack of empathy and relatability.
- The financial industry relies on industry jargon and hypermasculine speech, creating additional confusion and stress and highlighting the inequivalent financial education that many women face.
If the industry truly hopes to improve its support of female clients, several adjustments must be considered.
Personal Connection
To better retain and support female clients after their partner's passing, advisors must create effective financial relationships with them long before these life-altering events.
According to Forbes' coverage of a New York Life study's findings, "Half those surveyed said their financial advisor is incapable of connecting with them on a personal level by taking time to understand their specific needs."
Nurturing long-term partnerships would make it more appropriate for financial advisors to reach out to the individual and offer condolences and support, essentially providing a helping hand, easing financial stress and solidifying a trusting partnership.
If an advisor has not established a strong relationship with the female client before a partner's passing, the advisor should still take the time to reach out, make the connection and set up a meeting. An advisor should not delay in contacting the widow; some of the most vital work and financial decisions need to be coordinated in the first few weeks following the loss.
Female clients should be introduced into the conversations regarding their personal and familial wealth earlier in the advisor-client relationship alongside their husbands or partners. This will bolster their confidence and understanding of individual and family finances for generations to come.
Empathy and Understanding
Financial advisors' relationships with women often fall by the wayside because they tend to relate more to their male clients. This can result in advisors having less practice in addressing female clients who may, in fact, need more financial education than their male counterparts.
This can be due to laws and societal norms that made it difficult for women to be financially independent. For example, it was legal to deny a woman a credit card on the basis of sex until the passage of the Equal Credit Opportunity Act of 1974.
