- Advisors must understand that women invest with a purpose in mind in order to effectively serve them
Pershing today released a new report entitled, Women: Investing with a Purpose, exploring what drives women to invest and how advisors can best serve them based on those influences. While financial services firms have been ramping up their efforts to reach women investors, the report provides insight into critical gaps that still exist when it comes to what women want, what they need and what they are receiving from their financial advisors and firms with which they work.
Of the women who work with a financial advisor, 72% said they are very satisfied with their primary financial advisors. This finding points to room for improvement in advisors' interactions with their women clients. Compared to men, women investors were more likely to want improvements related to their advisors' soft skills. Women tended to highlight more than men "understanding my goals," "listening to my needs," and "patiently answering my questions." Women were less likely than men to suggest their advisors could improve in "picking investments that perform better" (27% of women compared to 36% of men). Interestingly, nearly half of women (47%) said there was nothing that their advisors should change when asked what areas their financial advisor can improve.
"While there are common threads among all investors in terms of their expectations of their financial advisors, these findings suggest that an important factor is being overlooked by advisors working with women investors, and that is the purpose behind the reasons they invest," said Kim Dellarocca, managing director at Pershing. "This missing factor may contribute to why 35% of women respondents who do not use a financial advisor say they don't trust financial advisors are working in their interests. The reality is that a woman's desired level of understanding can be different, which requires advisors to explore concerns, goals and trade-offs with greater directness and rigor."
Underlying many of the survey findings are unique challenges that women face later in life that stem from realities including their having longer life expectancies, lower incomes during their working years, potentially higher medical costs and a greater motivation for the beneficiaries of their investments to extend beyond themselves. Given these challenges, increased clarity of clients' goals can influence the ideal blend of solutions that may create more confidence and better experiences for women investors.
According to the study, retirement, education, flexibility and legacy are four common goals that drive women to invest.
Pershing and its affiliates provide global financial business solutions to advisors, asset managers, broker-dealers, family offices, registered investment advisor firms and wealth managers. A financial services firm located in 23 offices worldwide, Pershing provides business-to-business solutions to clients representing 5.8 million active investor accounts on the U.S. platform. Pershing affiliates are members of every major U.S. securities exchange, and its international affiliates are members of the Deutsche Borse, Australian Stock Exchange, Irish Stock Exchange, London Stock Exchange and Toronto Stock Exchange. Pershing LLC is a BNY Mellon company.