"Why can't a woman be more like a man?" moaned Prof. Henry Higgins in one of My Fair Lady's memorable moments.
If Higgins were in the wealth management business, he might do better to turn the question around. Successful practitioners are finding that business can benefit from a woman's touch--and we don't mean paint or wallpaper.
According to WOW Facts! published by 2004 Diversity Best Practices, women control an estimated $14 trillion of the nation's wealth and make 81 percent of family decisions about investments and savings. So it's clear that the fairer sex occupies an ever-growing portion of any advisor's book. But if you haven't figured out that they also demand a different kind of attention--with skills more characteristic of women than men--you may not be able to retain their business, even if you've inherited them as widows or daughters of longtime clients.
That may be why, "Some of the most successful planners I know are women," says former NAPFA Chairman Michael Joyce. "I hate to generalize, and I know some wonderful male financial advisors--" he adds, "but you have to connect with people in different ways, whether it's a man or a woman, a new prospect or a client you've had for 15 years, so it's very valuable to have that 'soft-side' perspective. Not that women can't make hard financial decisions," he interjects quickly, "but having that softer perspective is a real benefit."
It may not be easy to find. Despite the change in client demographics, women advisors make up less than 25 percent of CFPs and only 18 percent of CFAs. (And according to a recent Securities Industry Association report they account for just 19 percent of the retail brokerage workforce.)
An unusual seven women are on the 12-person staff working with Joyce, a CFA and CFP, and his associate Jack Payne, CFA, at the offices of Michael Joyce & Associates in Richmond, Va. and Bethlehem, Pa. Two are financial planning analysts, one a para-planner, a trader/portfolio administrator and two assistants or, as Joyce calls them, Managers of First Impressions. (No one else is allowed to answer incoming calls.) One of the analysts is a CFP candidate.
Women like to listen. They enjoy making meaningful contact and are natural teachers, says Janine Wertheim, president of Securities America Advisors, Inc. and chief marketing officer of Securities America, Inc. "But women don't need to show their egos as much as men; they don't need to talk down," she adds.
As the only woman on Securities America's President's Council, Wertheim has become even more aware of how men and women see things differently. "On the council, we may or may not end up with my point of view," she says, "but it is usually different."
From Wertheim's perspective, "The natural instinct [women] have to get more information about a person means someone might open up to you more because they know you're interested, and that's a plus in this business. Women have a sharing, nurturing component; they really want to know you before they make a recommendation. And they also have a teacher's mentality... the desire to educate," she points out.
Beth Cutler of UBS in Greenwich, Conn., spends "a lot of time on education." Until three years ago, she was a successful institutional trader for hedge funds, commodities and foreign exchange at firms such as Morgan Stanley and AIG. It was the need to educate women about personal finance that impelled her to become an advisor, joining UBS Financial Services where she partnered with Jason Andrews.
"About seven years ago, my mother became divorced and my father-in-law suffered a stroke. There I was, with two women at the same time of life who had relied on men to handle all their finances," she recalls.
Now, while she focuses her largely referral practice on women from 18 to their late 80s, her reputation has brought her a new source of business. "I'm finding that men in their 70s who are protective of their wives are coming to me. They want to know that if anything happens to them, their wife will be in good hands," she explains. "And they're bringing me both portfolios!" she adds.
As the "better half" of Evensky & Katz in Coral Gables, Fla., Deena Katz works with male colleagues (husband Harold Evensky among them), as well as male clients.
"I have to say for the most part that working with clients at such an intense level takes good communications skills, which are 90 percent listening skills, and women have that ... they get to the heart of things," Katz explains. "Male advisors tend to fall into two camps: those who are in touch with their feminine side, or bottom-line kind of people."
What does Evensky say? In a separate interview at his office, he notes: "I would suggest that women are inherently better wealth managers than men generally, because they have the ability to deal with and empathize with people. Men tend to be pontificators," Evensky continues. "Women are good listeners; they have the ability to listen, to empathize, to communicate."
Katz and Evensky work on a team basis, pretty much "interchangeably," although everyone in the office has his or her own area of expertise, Katz says. Having taken a grief-counseling course, one of her specialties is dealing with women--and men--who have suffered a loss through death, divorce--"people going through change," she explains.
"Planning is a natural for women; it plays to their strengths," says CFA and CFP Denise Farkas of Spero-Smith Investment Advisors in Cleveland.
First and foremost, says Farkas, are listening skills. Women tend to be more interested in how people think and feel about money, which is more "touchy-feely," she adds, than the quantitative side. "Clients--both male and female--want someone who's strong in their convictions, but also someone who takes the time to see what makes them different from other clients," she says.
Three years ago, Caroline Gundek gave up a successful advisory career to become director of Women's Marketing at Merrill Lynch. Today she works with 1,000 advisors--male and female--who have opted to participate in an internal network created to understand the needs of women investors. But she remains a legendary role model for Merrill's female advisors, as well as an expert on winning female clients, who, she points out, comprise 52 percent of the population and own 10.6 percent of businesses in the United States.
And those numbers--predictive of an increase in female investors--are growing. "Women are relationship-oriented," says Gundek. "They have to trust the individual they work with; they want a relationship with that person, not someone who says 'Now I'm going to tell you what to do.' Money is a very special thing to women. They're more interested in how it affects their priorities in life than they are in the money itself," she adds.
Which is exactly what Esther M. Berger identifies as a good female advisor's advantage. A CFP since 1992 and owner of Berger & Associates LLC in Beverly Hills, Berger calls Venus, "Venus" and Mars, "Mars."
"At the risk of being politically incorrect, I'm going to be gender specific," says Berger. "There are specific differences between the sexes: Women are better-versed in looking at how money will affect the rest of your life. Women--even those who are asset managers as I am now--are very focused on where the financial situation fits within the client's life." Men, Berger continues, are very bottom-line-oriented.
"And that's great," she says. "That's super. It's, 'What have you done for me lately?' They're less entranced with the broader issues than with putting up the numbers."
Not that women don't care about performance. "We're performance-oriented, too," she says, "but females look at the broader picture. We see money as a means of facilitating your life and enabling you to handle all the life issues, like funding a college education for your kids or finding a nursing home for your mother."
While both men and women go through life phases that impact investment objectives, women may react more severely to certain life-changing events. "We all go through phases in our lives when we are frozen," says Cutler. "When you hit milestones--divorce, a death, whatever--that's the time to have a more static, conservative portfolio. That's when I'll sit down with a client and tell her she doesn't have to make any decisions right now. We can just leave the money in muni bonds, Treasuries or CDs. I don't love doing this," she adds, "but you have to build a portfolio that's in sync with the time in their lives."
Do male clients appreciate such sensitivity? "As a rule, male clients are reluctant to share certain aspects of their lives," says Katz. "And there are still men out there who resist having a woman advisor. That still happens," she laughs, "but not to me!"
Conversely, there are female clients who prefer a male advisor. "Some women are brought up to believe only a man--their husband, their father--can handle money," Katz says.
In any case, Janine Wertheim of Securities America believes that choosing an advisor has more to do with chemistry than gender. "A woman doesn't necessarily prefer working with a woman or a man," she says. "It depends on the trust that's built up, about how they relate to each other...personality more than gender."
The ideal scenario, according to many women in the business, is to offer both perspectives--male and female--to a client. "It's a wonderful complement when you have a man and a woman working together," says Esther Berger. There have been times when Berger's organization was all female, other times when the employees were all male. The downside, she says, is always the lack of the other perspective.
"As a woman, I've learned not to get talked out of my intuition, but also not to let it rule when there's evidence to the contrary," Berger says.
When she started out as a PaineWebber broker, Berger was astounded to see production figures posted every morning from the day before. Her branch manager explained that was how he motivated his advisors--all men except for three-- Berger, the daughter of one of the 37 male brokers in the office, and the wife of another.
Today's wealth-management business has moved toward a more traditional female model, she believes, "a model that goes beyond numbers, beyond the bottom line," a move to become more client-centric. "If numbers are a proxy for male advisors, then client-centric is the proxy for women. But numbers and the bottom line are value added. There is a place where the twain meet," Berger says confidently, "and that's gorgeous!"
Nancy R. Mandell is managing editor of Wealth Manager.