EXECUTIVE SUMMARY
|
WITH THE WEALTH CONTROLLED BY
WOMEN PROJECTED to reach more than
$22 trillion by 2010, the opportunity to provide
these women with financial and investment advice
is a good one. But to do the job properly, CPAs
will need the right communication skills and to
understand some key differences between how men
and women behave.
WOMEN APPROACH INVESTING
DIFFERENTLY FROM MEN. They tend to
have some different attitudes about money and
decision making. Many women take longer than
men to reach decisions, ask lots of questions
and like to involve family or friends in the
process.
CPAs NEED TO LEARN HOW TO
COMMUNICATE WITH women. Men most
often break the ice with clients by telling
jokes; women don’t respond well to that
approach. Women also prefer an established
method and frequency of contact, be it weekly,
monthly or some other interval.
BEFORE WOMEN CAN INVEST FOR THE
FUTURE, they sometimes have to get
out from under significant debt. Because these
women have tremendous fears about dealing with
finances and money and may have been
conditioned to believe they don’t know enough,
they might be afraid of making the wrong
decision. | MAUREEN NEVIN DUFFY is a freelance
business writer in New Jersey. She is the editor
and publisher of the Corporate Governance
Fund Report,
www.cgfreport.com , and the newly launched
CGFR Daily Reports. Her e-mail address
is mnd23cpa@aol.com
. |
y 2010 the amount of wealth controlled
by women will swell to more than $22 trillion. And,
according to TrendSight Group, a market research
company in Winnetka, Illinois, by that time women will
hold half the Fortune 500’s top 20 jobs. Even
today, the picture is pretty rosy. Internal Revenue
Service bulletins show that women already hold $4.2
trillion in assets according to 1998 data (the latest
year available). And that’s good news for CPA
financial planners. Experts say these women still are
largely underserved when it comes to financial and
investment advice.
The women’s
market is important to CPAs for several
reasons. Women will inherit significant assets
over the next 10 to 20 years. In many cases
wealth gathered by their fathers, brothers and
husbands will pass into their hands. Others
will have wealth they accumulated on their own
as small business owners or corporate
executives. Many of these women will be
seeking sound investment advice because they
have little or no training in making
investment management decisions. Others who
have business savvy are simply too busy to
manage their own personal investments. To meet
this demand, CPA financial planners need to
know that the strategies they use for
interacting with male clients may not work as
well for female clients. Those who recognize
this may reap significant rewards. Vive la
différence!
WOMEN AND MONEY
CPAs who want to work with female
clients should first understand some of the
attitudes that shape their business
relationships. Experts tell us that some
women
Associate money with greed.
Feel guilty about having money.
Equate saving with selfishness.
Don’t feel they have enough
money to invest.
Ask lots of questions.
Take much longer than men to
reach decisions.
Like to involve family or
friends in their choices.
Want advisers to provide more
detailed explanations. |
Women at Work
The typical
affluent woman business owner
Describes her family
background as poor or lower or
middle class.
Became a business
owner at age 33.
Has been working for
29 years.
Went into business
for herself because she wanted
more freedom and independence.
Believes corporations
offer limited opportunities for
women. Source:
U.S. Trust Survey of Affluent
Americans, New York City,
www.ustrust.com . | |
Combine emotional factors with their
investment decisions.
Want to know what investment asset growth
will do for their families beyond just improving the
bottom line.
Often have serious debt problems to
overcome before investing for the future.
Want established guidelines for
communicating in terms of both frequency and method.
When working with women clients, CPAs should
treat them with the respect they offer all clients.
Here is some behavior to avoid:
Speaking above the client’s knowledge
level.
Talking down to her.
Telling her what she can’t or shouldn’t
do.
Delaying the return of her phone calls.
Coming across as cold or impersonal.
At the same time, to be successful there are some
things CPA financial planners should do when helping
women with their planning needs:
Spend time chatting to assess the
client’s knowledge and build trust.
Explore family needs and her concerns,
and if she requests it meet with key individuals such
as her friends or family members.
Emphasize the things wealth can do for
her family.
Be clear and realistic about investment
objectives. If men operate out of fear and
greed, then women work from fear, uncertainty and
doubt. This is what author Ginita Wall, CPA, CFP,
calls “the FUD factor.” Some women fear money will
make them bad people. Wall points to an AARP study
that said 42% of the women interviewed didn’t want to
be wealthy; in fact they saw wealth as representing
the baser side of human nature, as portrayed in famous
TV soaps such as “Dallas” or “Dynasty.” CPAs
must be alert to these sentiments, says Wall, who has
been recognized as a top financial adviser by Worth
magazine six years in a row and just published her
eighth book, It’s More than Money—It’s Your Life,
with coauthor Candace Bahr. Consequently, women
tend to give money away to their children or to
charity and in doing so often undermine their
advisers’ attempts to steer the money into investments
and other growth opportunities. Once CPAs understand
“how women work and what the accountant is up
against,” says Wall, they should stress how wealth can
help the client and those they love.
READ THE
SIGNALS When working with
women, communication skills are critical.
Female clients will typically signal their
discomfort. That means it’s up to CPAs to
learn how to interpret expressions and body
language, says author Judith Briles, who
explains how in her book The Confidence
Factor, 10 Smart Money Moves for Women.
Women who fidget, don’t make eye contact,
seem hostile, anxious or even ambivalent may
actually be apprehensive or feeling
overwhelmed, says Briles. One way to keep
the anxiety level down is to establish a
method and frequency for communicating. “I
will call you, or you call me,” says Briles,
“weekly, monthly or as needed.” Briles also
suggests engaging female clients on “safe”
subjects such as movies to relax them and
get them talking about their own goals and
fears, such as not having enough money to
live independently and having to move in
with their children. | |
PRACTICAL TIPS
TO REMEMBER
|
To be successful,
CPA/financial planners who work
with female clients need to
recognize the different ways women
approach money and investing.
Because some women associate money
with greed or feel guilty about
having it, CPAs should stress to
these clients how wealth can help
them and those they love.
When helping women
with their planning needs, CPAs
must avoid talking down to the
client or telling her what she
can’t or shouldn’t do. On the
other hand CPAs should explore
family needs, be realistic about
investment objectives and
emphasize things wealth can do for
her family.
Good communication
skills are critical when working
with women. CPAs need to learn how
to interpret expressions and body
language and act to overcome any
misplaced anxiety. Most women
appreciate a regular pattern of
contact with their advisers be it
weekly, monthly or some other
interval acceptable to both
parties. | |
CPAs should keep the conversation
simple, whether in writing or verbally. Briles tells
an amusing story of a Miss America she was asked to
coach after the woman’s audiences began demanding
refunds. Briles found the beauty queen had a tendency
to talk fast when she was nervous. CPAs should pay
attention when a client’s pitch rises and her speech
speeds up. She may be signaling that she’s nervous,
which means she isn’t giving her full attention to the
important matters at hand. Men often break the
ice with clients by telling jokes, but Briles says
most women aren’t wired that way. In fact female
planners have to fight the urge to share intimacies
with female clients, since women tend to bond this
way. She has seen clients take this to extremes, where
they’ve grown “more loyal to their advisers than to
their own money.” Women have to learn they’ve come to
you for advice—not to make friends. Briles suggests
talking about movies, which are safe and usually don’t
test social boundaries.
THE EMOTIONAL INVESTOR Most
financial planners are familiar with the impact of
emotions on investment decisions. Vince Campanile,
CPA, who added investment services to his Neptune, New
Jersey-based family accounting business about four
years ago, says advisers have to impress female
clients with the need for objectivity in investment
decisions. Campanile notes that down markets trigger
strong emotions to sell holdings. “I take the feelings
out of the equation, and we stay the course for the
long term,” he says. “Women look to financial advisers
for guidance because we offer objectivity.”
However, Wall warns advisers not to “cut them off
at the pocketbook.” She says women need to know
advisers care about them—not just their money. Wall
concedes that women operate from a more emotional
base. “Not an illogical base, but emotion and logic
together.” To better serve a female client, the
planner should “understand what’s going on
underneath.” The “solution-oriented” approach to
advising doesn’t work here, she contends. Under the
old sales-oriented method, advisers learned to
overcome objections. “Here you’re integrating the
solution to fit her needs—where she fits into the
world and what she believes,” says Wall.
DEALING
WITH DEBT Not every client
has investment resources immediately at hand.
Before women in debt can invest for the
future, they have to get out from under that
burden. Understandably, these clients have
“tremendous fears of dealing with finances and
money,” says Glinda Bridgforth, an adviser and
author who specializes in helping women get
out of debt. Her books include Girl, Get
Your Money Straight and the Basic
Money Management Workbook. “Women
have been conditioned to believe they don’t
know enough, so they fear making the wrong
decision,” says Bridgforth. They will
naturally be more hesitant when hiring an
adviser and probably will rely more on
references from friends, a strong track
record or an existing relationship.
Bridgforth, who bases her books and advice
on her own experiences, sees investment as
the next logical step after debt. This
philosophy is reflected in her
just-published investment guide, Girl,
Make Your Money Grow!: A Sister’s Guide to
Protecting Your Future and Enriching Your
Life, with stockbroker Gail
Perry-Mason. The book takes a unique
approach to freeing up extra cash to make
investments. While it’s hard to imagine the
average investment adviser suggesting a
client forgo weekly manicures for monthly
ones to free up $25 or $50 a month for
investing, this is one of Bridgforth’s
suggestions. |
Resources on Women and
Investing
Publications
Basic Money
Management Workbook by
Glinda Bridgforth, self-published,
1992.
The Confidence
Factor by Judith Briles,
Mile High Press, 2003.
Girl, Get Your
Money Straight by Glinda
Bridgforth, Broadway, 2002.
Girl, Make Your
Money Grow!: A Sister’s Guide to
Protecting Your Future and
Enriching Your Life by
Glinda Bridgforth and Gail
Perry-Mason, Broadway, 2003.
It’s More Than
Money—It’s Your Life! The New
Money Club for Women by
Ginita Wall and Candace Bahr, John
Wiley & Sons, 2004.
10 Smart Money
Moves for Women by Judith
Briles, McGraw-Hill, 1999.
Web sites
www.ewomennetwork.com . A
Web site dedicated to helping
women succeed, achieve and prosper
through business and career
development.
www.trendsight.com . A
consulting firm that helps
companies improve their
communications with women and
build sales and market share by
tapping into their buying power.
www.wife.org . The Women’s
Institute for Financial Education
Web site includes investment and
retirement resources for women. | |
GETTING STARTED Wall has an
interesting suggestion for CPAs that could reduce the
initial hand-holding and one-on-one ice-breaking time
with new investors. Her nonprofit Women’s Institute
for Financial Education ( www.wife.org ) has
added money clubs ( http://moneyclubs.com
) to its resources “to empower, advise and comfort
women.” Although the clubs were launched only in
September 2003, some 4,000 people already are signed
up worldwide. The organization gives members the
resources to run meetings and conduct various
exercises, in person or over the Internet, such as
those aimed at increasing net worth. One of
the clubs’ makeover programs is called “21 Days to
Boost Savings.” Among its other goals is to help women
find an investment adviser. CPA/financial planners can
meet women at WIFE seminars and conferences or
demonstrate their skills as leaders of money club
groups. Although the clubs may meet weekly, in person
or online, an adviser may be invited into a particular
club only once or twice a year. This still affords
them a chance to reach multiple prospects in the
women’s market.
WORKING WITH WOMEN Catering to
the female investor can be a lucrative market, says
Wall. But due to the different needs of women,
particularly the time commitment in working with new
investors, it may not be for everyone. This article
has touched on only one aspect of working with
women—communications. CPAs who want to truly meet the
needs of this market also will need to understand how
to attract female clients to their practice and what
products and services will best meet their particular
goals and objectives. However, CPAs will find the
rewards from the time spent developing this practice
niche can be significant. |