HOW WOMEN SHOULD CHOOSE THEIR WEALTH ADVISOR

My dear Friends,

Do you have a wealth manager or advisor? I mean, the sort who has your financial interests at heart and treats you with respect?

Today, women are wealthier than ever before. They control more money and are more powerful. There is, however, a dark spot-no matter what career a woman pursues, how independent they are, or how wealthy they are. For many dealing with wealth issues remains black magic.

One reason is the financial industry itself. A system that was set up centuries ago, by men and for men. Did you know that only 12% of the top 100 wealth managers are female? Seemingly ignoring the fact that today 40% of HNWI are women.

However, the industry will not be able to adapt if women have a clearer idea of how to choose a wealth advisor and what exactly they need to look for.

So let’s take a look and learn a little more about what to look for in a financial advisor.

What we can’t stand

  • The disrespectful “girly” approach. There is no one-size-fits-all. We also hate to be belittled and patronized. Just like men, women have different levels of financial expertise, and just like men, we deserve to be treated at eye level and with respect.
  • The ego-based approach: The “Here’s how I do business“ or “Here’s how we report to you” attitude is a no-go. We choose the service we desire and how we want that service to be delivered – not the other way around.
  • Having to chase information: The “If you have any questions, call me” attitude is not serving us. It is the wealth manager‘s responsibility to initiate the communication.
  • The machismo way. We want to work with an advisor who will be happy to listen and answer questions without making us feel stupid.
  • The condescending way. Research shows that gender bias is a key factor in the disrespect and condescension the financial industry shows towards women.
  • Lack of understanding and compassion. We do not want someone who can not relate to our life‘s journey. Compared to the average man, a woman spends 57% more time out of the workforce and 36% longer in retirement.
  • Working with the same advisor as your partner is fine, but…. The “but” means that if you and your partner share an advisor, you need to be sure that both your needs are met. You may approach money differently than your spouse.
  • The sales pitcher. Someone who tries to sell financial products rather than working with you to find your goals, how you can achieve them, and your investment preferences.

Preferred choices

  • You want an advisor who treats you as an individual with unique needs. Women have different wants and needs, and we have different levels of financial knowledge, expertise and comfort.
  • You want to be listened to and treated with respect. An advisor should never assume to know you. They need to get to know you, engage in meaningful dialogue, and work on building a trusting relationship.
  • First and foremost, you want an authentic relationship. You need advice and management that is tailored to your unique situation, specific goals, expertise and level of comfort. 
  • You might prefer working with a female advisor. Studies show a large number of women feel the same way and wish for more women advisors.
  • You deserve to be listened to and treated with respect. Change your advisor if you don’t get it.
  • Look for someone you can relate to. Like most women, you want to build a relationship of understanding with your advisor.
  • Find someone you can trust. Women want someone to who we can talk openly. About any plans we might have, changes we might have to face, or financial problems we might have to find a solution for.
  • Look for a holistic approach. It’s critical to find an advisor who isn’t only focused on assets and understands you, your circumstances, and your very personal risk tolerance.
  • Seek someone who understands the difference between goal planning and investment-management planning. Financial performance matters, but for you, money is, first and foremost, the key to flexibility in life.
  • Choose face-to-face advice at the latest when you reach the six-digit wealth level. Even if you have some expertise and plenty of financial confidence, four eyes are always better than two. You would not want to end up overwhelmed.

Pathfinder

First, you must establish what kind of advice or management structure you need. You should not be paying for a service you actually don`t need.

  • Investment advice
  • Exclusive -tailormade advice
  • Access to financial products
  • Asset Management
  • Sophisticated Financial planning
  • Estate planning
  • Trust creation
  • How much do you want to spend ?
  • Robo-Advisors
    • Fee structure
    • User friendlyness
    • Flexibilty
    • Risks and consequences
  • Online planning service
    • How much does it cost
    • What kind of service do I get
    • How does it work
    • How do you feel about talking to a complete stanger about your finances
  • Traditional wealth manger-personal advisor
    • What services do they offer
    • Preferred acces to financial products
    • How much do they charge
    • Are they certified
    • Can I build a personal relationship
    • What is the minimum balance required
  • Exclusive access to products, services or opportunities
  • The understanding of your desire for having an experience
    • Exclusivity
    • First In/Preview
    • Tailormade advise
  • High performance because you only work with the best
  • Creativity
  • Having an advanced sense of awareness
  • Undestanding your advanced education and exposure
  • Respect for your values and believes
  • Financial planning needs to be technically sophisticated and have emotional drivers

This is why you should check your options first and only make an informed decision.

Vital interview

Before you make a final decision, interview a selection of “candidates” first. Here are eight questions you should ask someone you entrust your money with:

1. What is Your Investment Philosophy?

2. What is Your Asset Allocation?

3. Do You Offer Financial Planning Services?

4. How Are You Paid, and What Am I Getting?

5. Can You Bring Down the Fees?

6. Can You Show Me Your Returns?

7. How Do Your Returns Compare to the Benchmark? (usually, you take the average earning from stock market indices)

8. What Security Controls Do You Have?

The empathy map

Because we want to build a relationship with our wealth managers or financial advisors, find out who your wealth manager really is.

Here is a simple tool – the empathy map:

Download the file here

This will help you make a better choice when choosing a wealth manager or advisor that matches your expectations. Wealth planning or management is not only about number crunching but also about emotions.

Speed Read

Make sure your advisor does neither treat you condescending or disrespectful.

Make sure you can relate to your advisor.

Think twice before you share an advisor with your spouse.

Make sure you know what you need and that you do not pay for services you do not need.

Use an empathy map.

You should have a wealth manager once you have reached the six-digit mark with your wealth. Opt for face-to-face or hybrid consultancy.

Remember, wealth planning or management is not only about number crunching but also about emotions.

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