"If you make listening and observation your occupation, you will gain much more than you can by talk." -- Robert Baden-Powell
A few months back, I had an interesting conversation with some women advisors who are part of our Winvestor initiative regarding what is it that women really look for and value when it comes to a financial advisor. Empathy, listening skills and emotional connect were some of the recurring attributes. Just then one of the advisors said, “Why only women clients, I see that even most male clients are more receptive and have better relationships with women advisors than my male colleagues.” That interaction got me wondering why we are not seeing more women advisors being part of the industry when they have such good potential to succeed.
Given that more women today are working, running businesses and boards of organisations across the globe, they are also making more money. According to the CFA Institute, income of women across the globe is expected to grow from $13 trillion to $18 trillion in the next five years; that is more than the GDP growth of China and India combined during the same period! By 2028, women are expected to control 75% of discretionary spending around the world. That is a lot of women who stand to benefit from financial advice.
Many studies have pointed out the differences between men and women when it comes to the thought process and how they go about their investments. The key element is always this: women clients need to be seen as people, not balance sheets. They need to be heard closely to understand what's important to them and what they want out of life. Then, with their dreams in mind, advisors should build a plan with the right products and solutions to help make them a reality.
While this is good for all advisors to know, women may have a natural edge when it comes to being a good advisor – especially in communicating and maintaining their client relationships. Women are naturally wired to be better financial planners because of their ability to listen and empathise, and use their emotional and interpersonal skills to build lasting bonds with their clients. However, at present there are very few women financial planners in India. Out of the total number of IFAs empanelled with DSP BlackRock, women constitute approximately only around 5%. These numbers need to increase with more women entering the workforce and the huge demand for women financial planners in the future.
It’s also not just women who appreciate the unique skills that women advisors possess. Both men and women clients see women as more trusting and serious players in the business. They also feel that women tend to understand better and not be too aggressive. In many organisations, women bring with them a fresh take on the existing systems, managing employees, customers and situations in their own way to get stellar results. This is especially true for businesses and practices such as an advisory business where feedback and empathy play a crucial role. This natural empathy can be a differentiating factor for female advisors who with their innate femininity, connect with and win over their clients. Women advisors understand and can relate to women’s issues, such as advancing their careers, the dilemmas between work and home, and saving for children’s higher education v/s saving for their own retirement.
Surveys also show that women like to hear real-life examples rather than pure financial analytics, statistics and jargon. So it’s no surprise that many female clients like the vocabulary women advisors use — they talk in everyday language rather than investor-speak. This business involves attentive listening— something women do well. Many women clients are embarrassed to ask questions that they feel are very basic. When they work with an advisor who is patient and has a nurturing approach, they feel comfortable to be vulnerable and ask more questions.
The advisory business can be a natural fit for women. Women advisors, especially independent financial advisors may appreciate the flexibility, opportunity and sense of community that the profession offers. Many women advisors say that the practice offers them the freedom to manage their time, control it and seek different ways to build and sustain their practice. They can choose to affiliate with large distributors — by becoming an employee advisor or franchise advisor or choosing to join a team or run their practice independently. Whatever they choose, they can have the flexibility to manage their practice in a way that works for them. This flexibility is one of the things that many women find appealing when choosing a career, especially mothers.
A very likely reason for the paucity of women in this profession could be that that most women have never been shown the career opportunity that exists. So, while men may outnumber women in this industry, we should expect a shift over the coming years, with more awareness and acceptance of financial advisory services as a profession. DSP BlackRock has been conducting many workshops for college going women on portfolio construction and financial advisory practice in an attempt to train the next generation in this upcoming field. And given their natural flair, I am confident that the proportion of women in this industry will only increase.
Aditi Kothari Desai is Head – Sales and Marketing at DSP BlackRock Mutual Fund.
The views expressed in this article are solely of the author and do not necessarily reflect the views of Cafemutual.