How Do Wealthy Women Choose Advisors?


Whether it be as a widow, as a single woman or even as part of a joint decision with a husband or partner, women are increasingly important in the advisor-client relationship.  It is predicted that women will be more important in financial decisions in the future than men.  In fact, research conducted by Spectrem Group indicates that women are more likely to rely upon a financial advisor than men.  Because of the importance of women in financial decision-making, it is critical that financial advisors understand how women choose financial advisors in order to gain their business in both the short-term and the long-term.

Spectrem Group recently conducted research with women who had between $100,000 to $25 million of net worth to gain an understanding of how they worked with financial advisors.  When women were asked the importance of various factors when choosing a financial advisor, 29% indicated that the perception that the individual is “honest and trustworthy” was most important.  This was followed by 19% who indicated that a referral from a friend or associate was the most important factor.  Sixteen percent of women identified investment tract record as the most important factor when choosing an advisor.  Fees were only important to 13% of wealthy women while tools such as the website or social media were not factors.  Brand was important to 12% of women but whether the advisor offered factors from multiple companies was not a choice factor.  


As you can see above, age did have some impact with referrals being more important to older female investors and investment track record resonating more with younger women.

Since trust was the most important factor when choosing an advisor, it’s important to be able to define “trust”.  For the largest percentage (84%) of female investors, trust was defined as “looking out for my best interests”.  This was followed by proactive communication (66%) and then by “adequately provides desired services” at 55%.  The absences of mistakes were identified as the way to promote trust by 44% of female investors while 34% indicated that “charging fees that reflect the value they provide” was a way to promote trust.  Finally, 29% indicated that advisors must “admit when they are wrong” in order to engender their trust.

Overall, advisors must work to develop relationships with female investors.  The best way to promote these relationships is through old-fashioned communication, proactive customer service and honesty.  Don’t focus on fancy technology or fees….focus on developing trust with your clients.