Key takeaways:
- Women represent a large and growing opportunity for financial advisors
- But advisors need to understand that their circumstances, goals, and the way they invest can be quite different from men
- Women can be great clients as they are generally less impulsive and more likely to provide referrals
My friend recently broke up with her boyfriend and immediately changed mechanics. What does one have to do with the other? Well, every time she took her car in for repair, the mechanic would only speak to her boyfriend even though my friend drove up to the garage, was holding the keys, and was the one to pay the bill.
Therefore, when one relationship ended, so did the other. The mechanic had never paid any attention to her anyway, she told me. She found a new mechanic who listened to her concerns and took the time to explain his diagnosis. She has now recommended him to a number of her friends.
There’s a lesson for financial advisors in this story. If you demonstrate a genuine intention to engage and connect with your female clients, it will build relationships that could drive the growth of the business for years to come.
Are you missing out on a big opportunity?
Women are a significant and growing economic force and represent a huge opportunity for advisors who understand their unique needs, circumstances and goals. With International Women’s Day coming up on Saturday, March 8, it’s a great time to examine how women invest and why catering to this demographic may help boost your advisory business.
According to the Bank of America Institute, women control 33% of wealth globally, a percentage that is expected to increase substantially over time due to legal reforms, rising education levels and other factors. In the U.S., more women than men are getting doctoral degrees or opening businesses. By 2030, women are expected to control two-thirds of personal wealth in the U.S. And then there is the upcoming Great Wealth Transfer as Baby Boomers pass on their wealth to those left behind. Bank of America estimates that women in the U.S. are poised to inherit $30 trillion by 2032.1
Advisors who ignore women do so at their peril. Like my friend who dropped her mechanic when she parted ways with her boyfriend, women are prone to switching financial advisors when they lose their husbands, either through death or divorce. With 40% of women widowed after the age of 65 and “grey” divorce exploding, that could lead to a tsunami of women searching for a new advisor.
Women are a different kind of investor
Could that be you? Do you understand the challenges that your female clients face compared to men?
First, there’s the long-standing pay gap which is even more pronounced among Black and Hispanic women. That leaves women with smaller retirement nest eggs and fewer Social Security benefits. Additionally, as leading providers of childcare and elder care, women are more likely to take career breaks or have multi-phase careers as they try to reconcile their professional goals with their caring commitments. That also reduces their capacity to save. Women also head the majority of single-parent households. And women on average live longer than men, meaning the savings they do have need to stretch for a longer timeline.
Despite these challenges, women are becoming an economic force in their own right, as I noted earlier. Whether women earn it, marry it, inherit it, or outlive it, the bottom line is that 9 out of 10 women will be solely responsible for their finances at some point in their lives.2
So ... women need financial advice that caters to their unique circumstances. They also need financial advisors who understand their wants and the way they invest, which is often markedly different from men.
Women tend to be more collaborative and coachable, may be less impulsive than men, and are generally more conservative in the way they invest. Yes, it may take them a bit longer to make a decision but once they decide to work with an advisor, they tend to take a longer-term view and trade less—which makes the job of a financial advisor that much easier. Rather than spending your time coaching them to avoid potential behavioral mistakes, you can spend more time on aligning to their priorities and helping them achieve their goals. Who wouldn’t want to do more of that?
And just like my friend recommending her mechanic when she found one that served her needs, women can be a great source of growth for an advisor’s business because of their higher propensity to refer you, when they are happy and engaged. In fact, research has found that women make 26 referrals to their financial adviser on average, compared with 11 by the typical male client over their lifetime.3
The bottom line
The combination of women being naturally wired to invest, and willing to work with advisors who genuinely understand their priorities and concerns, can make a partnership for women a win-win for both you and for the women you serve. In the years ahead, women are on a trajectory to control the majority of the wealth in the country. Failing to engage this demographic increases risk to the sustainability of any advisor practice.
Like my friend's former mechanic, are you prepared to potentially lose female clients by incorrectly assuming they are happy with the experience and services you and your team are providing?
Or, is this the year you seize the opportunity to build long-lasting relationships and intentionally engage your female clients—who may just become your best source of referrals for years to come?
1 https://institute.bankofamerica.com/content/dam/transformation/rising-wealth-of-women.pdf
2 Source: https://www.cnbc.com/2019/05/30/heres-how-women-can-become-financially-independent.html#:~:text=Some%2090%25%20of%20women%20will,from%20%2451%20trillion%20in%202015.
3 https://www.investmentnews.com/female-clients-more-likely-than-men-to-make-referrals-43802
Disclosures
These views are subject to change at any time based upon market or other conditions and are current as of the date at the top of the page. The information, analysis, and opinions expressed herein are for general information only and are not intended to provide specific advice or recommendations for any individual or entity.
This material is not an offer, solicitation or recommendation to purchase any security.
Forecasting represents predictions of market prices and/or volume patterns utilizing varying analytical data. It is not representative of a projection of the stock market, or of any specific investment.
Nothing contained in this material is intended to constitute legal, tax, securities or investment advice, nor an opinion regarding the appropriateness of any investment. The general information contained in this publication should not be acted upon without obtaining specific legal, tax and investment advice from a licensed professional.
Please remember that all investments carry some level of risk, including the potential loss of principal invested. They do not typically grow at an even rate of return and may experience negative growth. As with any type of portfolio structuring, attempting to reduce risk and increase return could, at certain times, unintentionally reduce returns.
The information, analysis and opinions expressed herein are for general information only and are not intended to provide specific advice or recommendations for any individual entity.
Russell Investments' ownership is composed of a majority stake held by funds managed by TA Associates Management L.P., with a significant minority stake held by funds managed by Reverence Capital Partners L.P.. Certain of Russell Investments' employees and Hamilton Lane Advisors, LLC also hold minority, non-controlling, ownership stakes.
Frank Russell Company is the owner of the Russell trademarks contained in this material and all trademark rights related to the Russell trademarks, which the members of the Russell Investments group of companies are permitted to use under license from Frank Russell Company. The members of the Russell Investments group of companies are not affiliated in any manner with Frank Russell Company or any entity operating under the “FTSE RUSSELL” brand.
The Russell logo is a trademark and service mark of Russell Investments.
Copyright © 2025 Russell Investments Group, LLC. All rights reserved. This material is proprietary and may not be reproduced, transferred, or distributed in any form without prior written permission from Russell Investments. It is delivered on an “as is” basis without warranty.
Russell Investments Financial Services, LLC, member FINRA (www.finra.org), part of Russell Investments.
RIFIS-26476
A message from Advisor Perspectives and VettaFi: To learn more about this and other topics, check out some of our webcasts.
© Russell Investments
More Behavioral Finance Topics >
