A 2017 study by Strategy Marketing revealed that 80% of women leave their financial advisor when their husband passes as they had no personal relationship with the advisor (1). In reaction, many firms began outreach programs for female investors, and committed to hiring more women as advisors. These are great steps, but they aren’t the answer to understanding women and money.
I’ve been in the investment industry for over twenty years, but I’m also a mom and a wife, a friend, a yogi, a book club member and much more. Like most women, I’d call my life complicated, and wonderful, and filled with so many ups and downs each day that it’s often hard keeping up. When it comes to how women think about money, it’s not this separate category in our lives, it’s linked to everything.
Consider, for example, a woman’s purse. A woman’s purse is often filled with a variety of items in addition to a wallet:
- A long grocery list in case she has time to swing by the store.
- The smart phone she checks constantly for text messages about her sick mom.
- The epi-pen for her husband because he has allergies and forgets to carry one.
- A pacifier in case she is babysitting for her grandchild and needs it.
- A makeup bag filled with who-knows-what.
- Paperwork she needs to fill out for a doctor’s appointment.
It’s an interesting exercise to ask a bunch of women to dump the contents of their handbags and compare what they are carrying around. In many ways, our lives are in our purses. But traditional financial planning processes go straight to the wallet by focusing on the numbers alone. How much money do you have, what are you spending, what are you saving, how are you investing and what are your goals – these are important questions, but they don’t get to the heart of what we all wonder, “Am I okay?”
Consider the woman with the purse I’ve described above. In her life, health is a big worry – her own, her mom’s, her husband’s health. She has so many people depending on her, and she is time starved. Money alone can’t solve any of these problems. When a financial advisor asks the perfunctory question – “How are you today?” – she’s going to say, “Just fine”- when the truth is, she’s struggling. What women appreciate is a different process to help them understand their emotions, clarify what really matters, and feel confident. Money serves a purpose to help them make most out of life – numbers alone are hollow.
At Prio Wealth, we employ a process that focuses on enriching lives, not just getting rich, and it’s called financial life management. Our advisors are trained to engage clients with a series of tools and exercises that create much deeper engagement. The result is a set of specific priorities – financial, and non-financial – that drive how plans are made and money is managed. For example, priorities may include health (get a personal trainer) and slowing down to spend more time with people you love (book a family vacation) along with normal goals like saving for retirement. It’s in simple language, it’s action-oriented and the goal is to give clients clarity, confidence and control – to help them feel better about life and money.
Of course, we also have all the other sophisticated resources and investment acumen of many wealth managers, but the unique insight from the financial life management process adds enormous value for our clients. Based on our experience, financial life management works for everyone – men and women – and can be delivered by either a male or female advisor.
Many traditional wealth management relationships focus on the money versus the person. With women who first experience financial life management, it’s great to see them relax and communicate about all that stuff they’ve been carrying around. It’s not surprising that many widows re-evaluate and change advisors when their husband passes away. At a time like that – when issues are emotional, complex and overwhelming – financial life management is a better way to get life and money back in balance.