Women face a number of unique risks -- longevity, gender-related illnesses, care giving responsibilities, etc. And so naturally, when it comes to money and investing, women take a different approach to meet their financial needs. Cafemutual spoke to some renowned women advisors to know what it takes to build a successful practice among women investors.
The first thing that financial advisors recommend is to identify and segregate women clients in two different categories - married, divorced or widowed women.
For a married couple, an advisor needs to adapt a different approach while handling their investments. Engage with the wife and draw her in the decision making process. Many IFAs make the mistake of blindly assuming that the husband is the sole decision maker and/or the wife is uninterested in investments and financial planning. More and more women today are interested in participating in decision making that affects the future and well being of the family.
So, the successful financial advisors suggest that it is the advisor’s duty to see that every married woman should be aware of the basic information, such as the need for a legal will, details of investments made by her husband, contact details of the financial companies from where investments have been made and bank account details etc. She should also be aware about the investments made on her behalf by the spouse.
If the client is single or divorced or widowed, the advisor should be sensitive to a few concerns on retirement planning. According to Dilshad Billimoria, IFA from Bangalore this category of clients is comfortable working with female advisors, since issues of independence, financial freedom and financial security are sometimes better understood. She further adds, “Women want to be heard and considered on par with men, especially, the unmarried and educated category. If an advisor is able to spend time and effort in listening to their problems, which are non-financial sometimes, it could create a pathway of trust for lifelong relationships.”
Secondly, advisors should balance risk with stability. Most women are focused on stability as opposed to growth. A few overseas studies suggest that women are more risk-averse and therefore may not be properly diversifying their investment strategies. Advisors should convince them to take some risk as it is essential for building wealth. A growth and income strategy should be applied to a broad diversified investing plan over time. The earlier that growth and income strategy is developed, the more likely it is to generate healthy yields in the future.
Shifali Satsangee, a financial advisor from Agra tries to make women clients realize their true financial potential by encouraging them to start investing early and promoting goal based consistent and disciplined investing.
Finally, an advisor should quarterly spend ample amount of time with their women clients trying to explain them in details their portfolio performance and future growth of their investments. Advisors can also profit by conducting women-oriented financial literacy programs in universities, work places and ladies clubs. For instance, Shifali conducts financial awareness programs in universities for teachers and students. “These programs serve the dual purpose of financial inclusion of women and also enhance our chances of adding new clientele to our firm, “says Shifali. Another IFA, Tejal Gandhi often conducts investor awareness programs in ‘ladies clubs’.
Advisors would do well to recognize that women investors have a greater desire for independent, personal and easy-to-understand advice with their finances.
