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Women Investors Want More From Advisors, Report Finds

A new survey from Boston Consulting Group suggests that although women’s share of global wealth is growing, the service they get from financial advisors is not equal to that offered to men.

One woman manages the family investments, but her bank addresses letters to her husband. Another woman notes that when she and her spouse sit down with their wealth manager, the manager assumes the husband has the final say on investment decisions even though her income is higher. These stories and others, related in a new survey by Boston Consulting Group that addresses the global wealth of women, share a common complaint--although women’s cut of global wealth is growing, the service they get from financial advisors is not equal to that offered to men.

Fifty-five percent of the women surveyed by BCG said there is need for improvement in their relationships with wealth managers, with 24 percent of that segment reporting a “significant” need for improvement. Seventy-two percent felt financial companies need a service approach tailored to women, with 14 percent of the segment “strongly” supporting that view. Few respondents had problems with the products that firms were offering; the service model was the bigger issue, in their view. BCG surveyed about 140 women around the world with at least $250,000 in assets, in research conducted this year.

“The dissatisfaction stems from the unshakable perception that men get more attention, better advice, and sometimes even betters terms and deals,” Peter Damisch, coauthor of the study and a BCG partner, said in a statement. “We heard this sense of subordination time and again in our interviews. The problems that cause women to feel like second-class clients are deep-seated. They stem from experiences in the advisory process as well as the communication style of private banks and relationship managers.”

Advisors might want to pay better attention to their women clients, as their pockets are growing deeper. Women in the United States and Canada controlled 33 percent of wealth in 2009, or about $9 trillion; BCG estimates it will grow to $11.7 trillion by 2014. Globally, women’s share of wealth under the management will rise at a compound annual growth rate of 8 percent through 2014, to $29 trillion. BCG says the reasons include a growing presence of women in the workforce, their greater involvement in managing family finances, and the greater incidence of inherited wealth owing to women’s longevity.

The complaints by women cited in the BCG report are familiar to Eleanor Blayney, a certified financial planner and author of “Women’s Worth: Finding Your Financial Confidence.” While it’s harder to verify whether women are getting worse service than men from advisors, Blayney says she sees complex dynamics in the interchanges between a couple and their advisor when they sit down to discuss investments. If an advisor talks more directly to the husband, sometimes the wife may opt out of the discussion or feel disengaged with it, Blayney says. “Women often do feel somewhat marginalized in those conversations. That being said, the reasons are complicated. It’s not simply that we (advisors) discount them,” said Blayney, who also serves as the consumer advocate for the CFP Board of Standards.

Another way flaw in the thinking of some financial advisors that can lead conversations between advisors and women to go awry is the assumption that women don’t understand investing or markets. Blayney says there’s credible data that show women are more risk-averse; indeed, the BCG report says that more than 70 percent of the women in its survey favored balanced or conservative investment strategies (for women older than 50, the percentage is nearly 95 percent.) On the other hand, women are more willing than men to admit when they don’t understand something about a security or an investment plan, and they’re interested in knowing more about the subject. The more they learn, Blayney says, the more willing they are to take related risks. By comparison, men tend to assume they possess more knowledge about investing than they actually have, and they become more risk-averse as they learn more, she adds.

The reality is that the financial lives of women investors are more likely to be rearranged by such changes as divorce, the birth of a child, or the death of a spouse than the financial lives men are, says BCG. Constance A. Stone, a CFP in Chagrin Falls, Oh., notes that women live longer, tend to earn less over their lifetimes, and often are caregivers to both children and aging parents, which takes a toll on their ability to generate income. So women are more likely to look at investments from a long-term perspective, more holistically.

Blayney says, “They want to understand how a financial strategy that makes sense on the page will make their lives different. We need to go beyond saying, ‘Well, this will make you more money over your lifetime.’ ” Advisors also need to be more skillful at addressing the emotional side of money, she adds, because women are more likely to see an advisor when they’re in a life crisis that leaves them vulnerable.

As discontent as affluent women investors are with the counsel they’re receiving in the FA world, the BCG report found 85 percent of women surveyed were indifferent to the gender of their advisors. Just 11 percent preferred a woman as a wealth manager; the sentiment in the survey was that personality and qualifications mattered more.

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