The wealth management industry is heading toward a massive transfer of generational wealth, and female advisers that leverage digital touchpoints are poised to take ownership of this new wave of assets.
In fact, Cerulli Associates projects that nearly 45 million U.S. households will transfer a total of $68.4 trillion in wealth to heirs over the course of the next 25 years. Coupled with the increasing investor appetite for more authentic and holistic financial planning — women advisers could be gaining an edge.
“Women advisers have a different skill set than men,” said Frieda Lewis, chief commercial diversity officer at Broadridge Financial Solutions during the InvestmentNews Women Adviser Summit last Thursday. “Women generally have better empathy, intuitiveness and listening skills.”
Data has shown that the bulk of advisers fall flat when including female clients into the conversation. After reviewing analysis that tracks eye movement, Merrill Lynch Wealth Management found advisers focus 60% of their time on the man in meetings with a heterosexual couple.
Moreover, on average, a woman experiences 10 behavioral miscues for every 30-minute meeting with an adviser, according to the data. Miscues include viewing women as more risk averse, assuming women are less knowledgeable than men about investing and concluding a couple’s finances are merged or jointly invested.
“The female adviser would be less likely to make those same types of miscues compared to their male counterparts,” Lewis said. “Female advisers actually have the ability to really get to know their clients on a deeper level, and build a much stronger trusting connection.”
“The first one is experience, the roles that women have in their private lives gives them insight into the conversations that need to be had,” he said. “Further, women have no fear of having emotional conversations, unlike men that have been socialized to be reticent to emotions.
So for women, it’s not biology — it’s role, it’s experience, emotion, and the willingness to share or educate the client on how they deal with their problems or issues,” he said.
As today’s financial adviser shifts from the stock picker to someone who’s playing an active role in a client’s financial life, more advisers will look to allocate their tech stacks to new client acquisition and client facing activities.
“From the younger Baby Boomer to Gen Z, there’s a new generation gap — it’s called expectations,” Coughlin said. “They expect digital touchpoints as often as possible — we’re going to see a whole new generation of advisers that are going to be graded on their ability to have deep conversations to engage clients to think about their future, not just their portfolio.”
Goldman Sachs Personal Financial Management’s head of FinLife Rachel Schnoll said advisers can use technology to help humanize the experience with the end client.
“As financial advisers, when you start talking about taxes or investment performance with a client, their eyes glaze over,” Schnoll said. “So what we’ve done at Goldman Sachs is developed behavioral finance tools that allow the adviser to really get to know their client in a gamified way.”
It’s about bringing financial planning to the next age, according to Schnoll. “You’re doing more than financial planning and more than just establishing that balance sheet or cash flow statement for your clients, but you’re helping them with their life planning,” she said.
With the adviser-investor dynamic shifting, tech providers are working to curate the most up to date technology tools to offer a digital experience that emphasizes both planning and investing, according to Andrew Altfest, president of Altfest Personal Wealth Management and founder and CEO of FP Alpha.
“What [FP Alpha] did was built a digital financial manager, which allowed us to offer clients a private client website that provided account aggregation where they can see all their accounts in one place, they could see all their spending that is linked to their credit cards and their bank accounts, and they can see what they’re spending their money on,” Altfest said.
The tool works like a “live budget,” he said. “We can use our digital experience to co-plan with clients, incorporate live planning meetings and run different scenarios.”
From a marketing perspective, it’s important to leverage tech during client interactions even before an investor is a client, according to Samantha Russell, chief marketing and business development officer at Twenty Over Ten.
“Investors are already creating an impression and perception of your brand and business,” she said. “This comes from when they visit your website, interact with you on social media, or read an article that you wrote.”
According to the 2020 InvestmentNews Adviser Technology Study, only 40% of advisers use digital marketing tools, compared with CRM (89%), financial planning software (83%), and portfolio management tools (75%).
“So there’s a real opportunity for advisers to implement tools that are going to help streamline, automate, and help them with personalized communication,” Russell said. “Yes, this is important for finding new prospects, but also for ongoing client communication. This is a really big hole for a lot of firms, and that is where there’s the greatest opportunity.”
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