Wealth Management Practice By and For Women Launched By San Diego Firm

Wealth Management Practice By and For Women Launched By San Diego Firm

A San Diego wealth management firm has launched a separate practice group staffed by women and targeted at women, specifically high-net-worth women over 45 who own their own businesses, are going through a divorce or have become widows.

A San Diego wealth management firm has launched a separate practice group staffed by women and targeted at women, specifically high-net-worth women over 45 who own their own businesses, are going through a divorce or have become widows.

The practice, Wealth by Design for Women, meets “a real need” in the wealth management industry, said Mark Delfino, managing director of HoyleCohen, the San Diego-based firm with over $500 million in assets under management that is affiliated with Focus Financial Partners. “Studies have shown that in the next decade, women will control two-thirds of consumer wealth,” Delfino said. “Despite this, the market has been slow to give them the support and services they need to manage their wealth and life goals.”

While wealth management firms have increasingly sharpened their focus on women over the past decade, HoyleCohen may be one of the first to create a separate division staffed exclusively by women, and set up to serve only women.

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“It’s very smart for firms to carve out that kind of market niche,” said Dan Inveen, principal and director of research at FA Insight in Tacoma, Wash. “The market is too competitive and it’s always better to differentiate yourself. It’s also more economic and efficient if you can serve a more specific, homogenous client base. And it’s easier to build up capabilities and expertise to serve the needs of that group.”

Bing Waldert, director at Boston-based research firm Cerulli Associates, agreed. “It makes sense,” Waldert said. “Ninety percent of advisors are male and women may well prefer to do business with another woman. Our research has shown that while women are slower to choose an advisor, they are more loyal once they’ve made a decision.”

Women Unhappy, Under-served
Indeed, nearly three-quarters of women expressed unhappiness with the service they received from financial service firms, products they were offered and their financial advisors, according to research cited by Elisabeth Cullington, 51, co-founder of Wealth by Design for Women. “I saw for myself that there was a huge need to serve women, especially those who were divorced, when I had my own wealth management practice,” said Cullington, who joined HoyleCohen in 2008.

Wealth by Design for Women’s other co-founder, Janet Acheatel, 58, said she came out of retirement after a career of portfolio management to help launch the practice. Recent tragedies in her own life, she said, made her more empathetic to the needs of widows and women going through transitions in their lives. “Women feel they are under-served and not listened to,” Acheatel said. “They really do need a different approach.”

According to Acheatel and Cullington, that approach centers around understanding the distinctive viewpoint and values of female clients.

Even though the practice is geared towards women who have at least $1 million in investable assets, those women are still concerned about out-living their assets, Acheatel said.”They’re very aware of health care costs and actuarial tables,” she said. “They’re still conscious about becoming a bag lady. Men don’t necessarily think that way.”

What’s more, having a genuine long-term relationship with an advisor who understands their outlook on life means more to women than a successful transaction, according to Cullington. “It’s the difference between focusing on the balance sheet versus the balanced life,” she said. “Men tend to be concerned about increasing the value of an asset and women are more concerned about financial security.”

Does Gender Matter?
So how critical is it for women clients to talk to women advisors?

Although Wealth by Design for Women only has female advisors, Cullington said she’s not convinced a successful client-advisor relationship is “gender-related. It’s more about trust and respect, and I think men can have just as much chance of success working with women.” And even though the practice is geared towards women, Acheatel said heterosexual couples would also be welcome.

Women advisors said working with female clients had both benefits and potential pitfalls.

“Sometimes when a woman is coming out of a bruising divorce, they just don’t want to see another man for awhile,” said JoLynn Free, senior vice president for RBC Wealth Management in Austin, Texas.

Women also often find it easier to relate to other women, said Tessie Yoste, an advisor and certified financial planner for Miami-based The Lubitz Group, which is owned by one of the industry’s higher profile women, Linda Lubitz. “Clients can identify with the ladies in our firm when we talk about issues we have gone through that are like theirs,” Yoste said. “We can help them by holding their hand not only about their finances but about being knowledgeable and confident about themselves.”

The characteristics of clients most important to a financial advisory relationship tend to be driven more by personality than gender, said Jane Williams, chief executive of Sand Hill Global Advisors in Silicon Valley. But women tend to be “very, very open,” she said. “They can become nervous that they shared so much, and that can lead to confusion in the relationship, which can become more personal.”

Wealth by Design for Women is counting heavily on referrals and local centers of influence for business, Cullington and Acheatel said. The firm is also marketing on the Internet and has hired a local public relations specialist to work with local media.

The HoyleCohen division will also use educational programs, including “circles” of women who will meet in small groups to discuss various topics. And on October 1, Women by Design for Women will host a financial symposium for women at the San Diego Marriott working with the Susan G. Komen for the Cure foundation to promote breast cancer awareness.

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