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How to Reach Executive Women Investors

Ultra-high-net-worth, yet surprisingly under-served


“Emerging market” may seem like a strange term to apply to high-net-worth women. They have long controlled as much wealth as men, and as Figure 1 demonstrates, all projections point to the fact that women will control an overwhelming majority of investable assets in the not-too-distant future. Yet financial advisors have largely ignored this group – until rather recently. Credit for the particular characterization as an emerging market goes to Sally Krawcheck, co-founder of Ellevate Network and a former president of Global Wealth and Investment Management for Bank of America, who says the financial services industry has cut itself off from the trillions of dollars in women’s wealth. 2 Given the recent proliferation of studies and articles pointing out financial advisors’ shortcomings in attracting and retaining this audience, and their consequent awakening to the importance of this clientele, the description seems apt.

Ultra-high-net-worth women, whether they qualify by means of inheritance or earnings, are obviously potential clients to the advisory community. Given their growing importance in the world of wealthy individuals – and the fact that they have not been extensively courted – executive women should be a particular focus for advisors to expand their current and future business pipeline. You can build a relationship by recognizing what makes executive women unique as clients – and then capitalizing on those differences.

They have different priorities than men


Industry wisdom concurs that much of the “disconnect” many financial advisors experience with women investors is because the traditionally male-dominated profession is insensitive to some major gender differences when it comes to money. This disconnect has been reflected in recent statistics showing women often change their financial advisor within one year of a spouse’s death; some estimates even run as high as 70 percent. 3

The reason? Historically wealth acceleration has not been a priority for women. Rather, they value asset preservation, focusing on caring for family, work/life balance and, importantly, living comfortably in retirement, which on average lasts longer than that of most men due to their likely increased lifespan (a major concern for many women investors).

They have different priorities than other women


A study by Spectrem Group revealed, somewhat surprisingly, that executive women are less likely to have children or grandchildren, undoubtedly because they have dedicated themselves to their careers. That same study also showed the primary concern for executive women is similar to the broader affluent population: the well-being of their family members. However, for executive women those family members tend to be children (if they have them) and aging parents, not a spouse. 4

They seek an Advisor's expertise above and beyond their own proficiency


Highly affluent professional women are more knowledgeable about financial products — threequarters self-describe as very or fairly knowledgeable on investing.4 Yet even though 38 percent claim they want “do it yourself” autonomy in investment decisions, women making in excess of $200,000 per year are exceptional candidates for advisory services. Why? Data has shown that the “autonomy” they seek is more of a desire for expert advice that includes overall financial planning and a reluctance to be steered toward specific investment products. 4

They are comfortable with risk


Contrary to popular belief, women are not as risk averse as once thought. Studies show that affluent women investors actually tend to take more risks, but do so more cautiously. These women are more comfortable taking risks than most investors (more than 50 percent compared to approximately 33 percent of the broader affluent group), but with the caveat that they fully understand the risks they are taking.4 They do their homework and place emphasis on fully understanding the risks before executing any opportunity. Executive women in this high earnings group are comfortable with alternative investments, commodities and real estate; are three times more likely to invest in hedge funds, venture capital and private equity; and twice as likely to invest in commodities and precious metals. 4

They expect you to text


At an average 50 years old, executive women are much younger than the broader affluent population who average 63 years of age. Ninety-three percent are college grads and 63 percent have advanced degrees, as opposed to 73 percent and 39 percent, respectively, of the broader affluent population. They also tend to be very technically savvy and frequent users of social media — and they are more likely to text with their financial advisor. 5

So where to begin? Listen to their goals, both financial and personal


Learning how to communicate with women about their money is critical to success. Doing business the “old way” or spouting industry jargon and portfolio performance to impress potential female clients with knowledge and expertise will not win the day. Listening rather than talking is a trait women value in an advisor. Developing a holistic relationship that addresses life and family goals along with personal concerns will help create and sustain a successful business relationship. No matter the source or sample, every study of high-earning executive women agrees: women in this group are all dealing with the one limited resource we all share — time. They are consumed by a demanding job, the needs of family members and the nearly impossible task of attending to their own future needs. Savvy advisors are recognizing that focusing on just financial advice is sometimes not enough. Building a lasting relationship is key and should include both concern and solutions for the issues these women face on a daily basis. While these women are champion outsourcers, they may not necessarily have thought out the consequences of continuing their supporting roles after the paychecks stop. For instance, adding professional healthcare and health insurance advisory may be critical for certain clients. Asking the right questions will initiate the right conversations. Is the long-term disability coverage from their business enough? What about long-term care insurance? If there are children in the picture, are college costs covered? Is elder care an issue? Do parents live nearby or are remote check-in and assistance needed? Only by understanding her total situation can an advisor begin to form a cohesive plan to meet her financial goals. As one successful advisor put it, “Many executive women have spent their lives ensuring everyone else’s oxygen mask is secured first. Advisors who have the patience, empathy and courage to sift through what matters most to these women and help them create a plan for success are likely to have clients for life — and the referral flow to make all the time spent worthwhile.” 6

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1 Robinson, Tom. Wealth Management 2015 and Beyond: Trends and Challenges. CFA Institute. January 2015.
2 Marks-Jarvis, Gail. “What women want: Better pay, counsel.” Chicago Tribune. June 28, 2015.
3 Mellan, Olivia. “Working With Widows.” ThinkAdvisor. February 14, 2014.
4 Frank, Robert. “What wealthy women want.” CNBC. January 13, 2015.
5 Fox, Emily Jane. “Wealthy women are younger and less likely to have kids.” CNN Money. January 13, 2015 http://money.cnn.com/2015/01/13/luxury/wealthy-women/
6 Gaze. Christine. “How savvy financial advisers work with successful women.” Investment News. August 7, 2014.
The opinions expressed herein are those of the author and do not necessarily represent the views of The Northern Trust Company. The Northern Trust Company does not warrant the accuracy or completeness of information contained herein, such information is subject to change and is not intended to influence your investment decisions.