The Acquisition Transition
New client acquisition is the bane of almost every financial advisor. Finding new business is the lifeline of every financial practice but most advisors complain that acquisition tasks are tedious, time-consuming and often costly. Many argue that the rise of robo-technology and growing numbers of do-it-yourself investors make acquisition efforts an increasingly difficult endeavor.
Under The Radar Prospect Pool
While there are varying degrees of truth to these observations, a bountiful pool of affluent prospects remains largely untapped if for no other reason than they are hiding in plain sight. They are professionals, business owners and entrepreneurs who have achieved significant levels of success and wealth. Their numbers are vast and they are ideal prospects by any definition of the word. Yet, they generally remain sight unseen. They fail to show up on the acquisition radar of most advisors because of one inexcusable factor: they are women.
Times have changed. In the traditionally male-dominated world of finance, the perception that men rule is no longer the rule of thumb that determines acquisition success. Women have quietly risen to roles of prominence in the wealth management arena both as advisors and clients and their ascendance on both sides of the equation is a trend that is expected to continue for generations to come.
The Realities of Women and Wealth
Research into the female financial phenomenon tells a compelling story:
- Women currently control about 60% of the wealth in America
- Almost half of the millionaires in the United States are female
- 70% of assets transferred over the next two generations will be controlled by women
- Women are becoming wealthy at twice the rate of men
- Women currently earn almost half of all law and medical degrees
The rise of women as investors will have a profound impact on advisor acquisition and retention performance. Industry research reveals that within one year of the death of their spouse, about 70% of females will switch financial advisors. While this is bad news for advisors who lose these accounts, it’s good news for those who position themselves to capture the vast amounts of female-controlled assets that will be in motion.
Alter Your Perceptions
Value propositions must similarly transition to reflect the unique values of female investors. Advisors who advocate holistic approaches that focus less on product performance and more on the purpose of money will thrive in the new environment. Females tend to be more emotionally attached to their money than men. It’s why they will gravitate towards advisors who build relationships with them on a deeper, more personal level. They are seeking relationships with advisors who understand not only what they say, but moreover, how they feel. Value propositions that connect the dots linking head and heart will resonate with female investors.
The hard skills of a financial advisor will always be important to both genders. What will change is how soft skills are applied. Women are more willing than men to be educated in the nuances of wealth management. They want to learn about how their money is managed and advisors who can engage in a financial dialogue with women in a tone and style they are comfortable with find a receptive audience. Satisfied female investors will also reward you for the extra effort by making more than twice the number of referrals as male clients.
Make Your Advisory Team Co-Ed
Advisory teams that don’t have a female member or members to color their perspective will struggle in the years ahead. For this reason, achieving a better gender balance should be a primary goal for most teams. The demand for female advisors is already exceeding supply, so opportunities for women in wealth management will rise exponentially in the coming years. In next month’s article, we’ll explore what female advisors can do to prepare themselves for the challenges ahead.
Like this tip? Are you expanding your next generation of clients? We have many powerful lessons and proven strategies to help you build a better practice and become even more successful as a financial advisor. Contact us today about our coaching programs.