Want to Connect With Women Investors? Here’s What Matters
Women wield more financial power now than ever before. New research gives you the tools you need to understand their needs and expectations.
Clients have different approaches to investment decisions within households. Often, one household member takes the lead on investing and long-term financial planning. Even when the process is collaborative, you may still have one primary contact or person with whom you have the strongest relationship.
T. Rowe Price proprietary research has identified that men are far more likely than women to identify themselves as the household's primary decision-maker (65% versus 42%, respectively). Women were nearly twice as likely as men to say they shared financial decision-making equally with their partners (42% versus 26%).
Often, one partner takes the lead on investment decisions
Source: T. Rowe Price Retirement Saving and Spending Study, 2021
Given these trends, many financial professionals find it difficult to connect with women investors. But now, more than ever, finding opportunities to engage women clients is essential.
Women now control more than half of the country’s household wealth. A woman is the breadwinner in 40% of households with children under 18. Yet, many women feel alienated from the financial services industry. A 2020 survey by Boston Consulting Group1 found that nearly one-third of women worldwide felt that financial representatives treat them differently because of their gender. They want to work with a financial professional who respects them and understands their needs, regardless of their role in household investments.
Identify her financial role
T. Rowe Price conducted proprietary research on women’s financial decision-making roles in the household. Based on needs and expectations when working with a financial professional, we determined women investors' primary roles include:
- Primary Decision-Maker
- Shared Decision-Maker
- Delegating Decision-Maker
The Primary Decision-Maker
As the sole or leading financial decision-maker in her family, she:
- Likes details and frequent, transparent communication
- Wants to understand the “why” behind her portfolio’s investment performance and may compare her returns to index funds or friends’ portfolios
- Feels pressure to ensure her household's financial well-being and wants a financial professional who can help her stay informed and make the right decisions collaboratively
The Primary Decision-Maker needs someone she can trust. Most importantly, her financial professional should help her feel confident in her decisions.
The Shared Decision-Maker
This investor shares financial decision-making with her partner and wants:
- Regular communication and idea sharing so she feels valued and respected as an equal
- Financial insight and guidance to help her feel empowered
- A collaborative financial professional who understands and cares about her family and can help her stay on top of market trends—including environmental, sustainable, and governance (ESG) investing opportunities
Ask the Shared Decision-Maker about her concerns, then reinforce the “big picture” by focusing on her financial plan and progress toward her goals.
The Delegating Decision-Maker
Although this client takes a limited role in her family’s financial decisions, she:
- Wants to be seen as part of the process
- Needs to feel comfortable asking questions
- Expects you to have clear and firm opinions about the financial decisions for her household
To best serve the Delegating Decision-Maker, get to know her family and take time to help her understand her household's financial situation. Be proactive and reach out to her about life transitions that may impact her financial responsibility, such as divorce or widowhood.
Differing roles, common expectations
Despite the different approaches these investors may take to household investment decisions, they share three fundamental expectations of financial professionals.
Women investors have three key expectations
And the common theme uncovered for women? The need to build trust with financial professionals.
Trust is a differentiator. We conducted a workshop with women investors to better understand their experiences with financial professionals. Learning and communication emerged as two primary pain points—we believe these are key factors in establishing trust.
A woman investor wants to know that her financial professional has the expertise to help her make good decisions. However, each role needs that expertise delivered in a specific way. While the Primary Decision-Maker may want to benchmark the performance of her portfolio against overall market performance or other indicators, the Delegating Decision-Maker may need more of a primer on how the financial industry works overall, as well as opportunities to seek more information on her own.
Women investors want the input of a knowledgeable professional who can look at their unique situation and make informed recommendations. Again, the delivery nuances here are the keys to winning trust. While the Shared Decision-Maker wants someone who speaks to her as a partner, the Delegating Decision-Maker wants a more comprehensive guide, and the Primary Decision-Maker wants someone who can be a sounding board and coach.
Because every woman investor is unique, each wants to feel that you understand her situation and give her individualized advice. For the Delegating Decision-Maker, even though she isn't involved with making the financial decisions, appreciating her vision for her household is key. You can use the Visualize Retirement Workbook to encourage her to think about the future. More experienced investors like the Primary Decision-Maker may have a better handle on their goals but will still benefit and appreciate check-ins to be sure they’re on track.
Though their approaches and expectations may differ, women investors expect their financial professional to understand their needs and priorities. As you collaborate with women in your business, tailor your approach appropriately to cultivate trust.