Women CFP/women investor relationship more about education than beating S&P

Nannette Nocon is a certified financial planner who has earned other credentials that attest to her proficiency.

Her female clients may think of her as more of a teacher than a CFP.

“Women like the idea of being educated,” said Nocon, who has been in the financial services field for nearly 40 years and has some clients with little investment background.

“That’s the part I love about what I do: educating clients about the options and getting them excited about what money can do for them. Because really, money is only a means to do the kinds of things that we want to do to meet our goals and objectives.”

According to McKinsey & Company, women already control one-third of total U.S. household financial assets and are expected to control much of the $30 trillion in assets held by baby boomers in fewer than 10 years.

Currently one-third of American millionaires are women, according to career site zippia.com. But with women outliving men by about five years and a huge wealth transfer taking place among baby boomers, the number of women with at least $1 million in liquid assets is expected to rise.

McKinsey noted that “Over the next three to five years, as women increasingly take responsibility for making their households’ financial decisions, they will become the critical battleground for wealth-management firms.”

In another breath, McKinsey reported that 70% of women change advisors within one year of their partner dying.

Building relationships that educate clients about their choices will be crucial to keeping high-net-worth female clients, according to some Rochester-area advisors with decades of experience.

“We don’t want success in one interaction,” said Nocon, founder of Nocon & Associates, a private wealth advisory practice of Ameriprise Financial Services LLC. “We want this to be a lifelong partnership with the clients.”

Many advisors may first need to brush up on their own educations by learning how to communicate with female clients.

CFP Board, which sets standards and enforces requirements for certification for certified financial planners, reported that as of the beginning of May, 76% of CFPs were male.

“A lot of women who come to me say ‘this male advisor is not looking at me when he talks to me; he doesn’t really pay attention,’” Nocon said.

Heather Goodbody, senior vice president and private wealth advisor at Goodbody & Associates Merrill Private Wealth, said the industry has done more to appeal to female clients in terms of opportunities to learn about wealth management despite a preponderance, or maybe because of the high proportion, of male advisors.

“It’s always great when an industry becomes more intentional about directing their resources and knowledge to a specific group of people,” she said. “What you’re seeing more from the industry are many more conferences — many more opportunities to learn directed primarily to women.”

Goodbody said the discussion about wealth with women tends to be framed as a journey. “It might begin with managing careers, managing for future investment and retirement needs; it also extends to managing relationships, not only from a financial perspective, but also from a caregiving perspective and what those implications might be.”

While there aren’t pink or blue portfolios, there are generalities in investing styles that the industry has to recognize.

Women are more likely to have breaks in their careers that affect their earning power and are also more likely to care for elders and children, said Lori Van Dusen, founder and CEO of LVW Advisors. “So you have to be able to do scenarios around that.”

Female advisors who have worked with women for years said they tend to plan and invest for the long term and are less likely to be interested in beating the S&P.  They tend to diversify and invest to seek or preserve a lifestyle.

Some advisors say that women are more likely to invest with their values and be concerned about environmental, social and governance issues. Advisors also said that women may be concerned about outliving their money.

They tend to be more likely to ask questions and say they don’t know.

But that doesn’t mean they are timid.

“I think there’s a stereotype that pervades the industry, which is that women are more risk averse,” Van Dusen said. “I don’t think it’s true. I think that women want to be aware of the risk they’re taking. Women will dive in, they just want to know how deep the water is. Women tend to want to take only as much risk as they need to reach the goal.”

Elizabeth Thorley, founder and CEO of Thorley Wealth Management, said in her experience, women want to understand and communicate and build a relationship before they start talking about specific investments.

“We need to understand the big picture and the client needs to feel comfortable,” she said.

Thorley said many of her female clients are in transition — marriage, divorce, death of their spouse.

“It’s spending time to understand where they are emotionally with all of that.”

She goes on to say, “My approach is more about learning what the life goals of the client are (…) before doing any problem solving or providing solutions.”

She said many women investors want to be sure they reach financial security, will be OK in retirement, can fund their children or grandchildren’s education and have investments aligned with their lives.

When the conversation finally turns to options, Thorley said it’s not her place to tell the client what to do. “We’re trying to help educate them so that they come to the conclusion that’s best for their situation.”

Patti Singer is a freelance writer in Rochester. Contact her at [email protected]