Financial advisors may often feel that the most important aspect of building stronger relationships with women investors is performance. That pressure to deliver can feel especially high with clients who bring significant assets to the table. But in the client's eyes, an advisor's ability to connect with them on a deeper level may be just as important.
New York Life Investments (NYLI) research shows that high net worth clients, especially women, demand not just investment performance but also a sense of true alignment with their advisors. For example, 50% of these clients say that whether or not an advisor understands their goals plays a major role in helping them determine whom to hire. Yet more than 25% believe advisors struggle to relate to women in general.
Investors want to work with advisors who align with them on their interests—from their financial needs and goals to their personal experiences and core values. They want a professional who demonstrates care and concern for both their assets and their overall success and well-being.
As NYLI survey respondents suggest, money can be emotional. Opening up to a stranger, even a professional, involves a certain level of vulnerability and requires a significant amount of trust. Clients may find it easier to share openly with advisors whom they align with on important issues. For women in particular, an advisor's ability to understand their challenges is a critical part of a good relationship.
Yet some advisors hinder that alignment before it even has a chance to take shape. Many advisors feel compelled to do much of the talking in client meetings, and that instinct makes sense. To financial professionals, it feels critical to deliver high-quality advice. Clients do want this, of course: NYLI survey respondents ranked investment knowledge as the most important factor in selecting a financial advisor.
But when an advisor focuses too much on sharing their expertise, the client may not feel heard or understood. This crowding out can happen with any client, but women in particular see it as a concern. In fact, 28% feel their advisor pushes them out of financial conversations, whether intentionally or not. This experience may explain why women investors told NYLI that they seek to hire advisors who treat them with respect and as equals.
Again, advisors may feel obligated to show their value primarily through portfolio performance. And while clients do care about investment results, they also want to feel seen and heard as people. Twenty-seven percent of women report switching firms because they lacked a personal connection with their previous financial advisor.
Part of aligning on a personal level means not just seeing a client as a collection of numbers—a net worth, an asset level, or a risk tolerance score. These metrics matter, but the person behind them is just as critical.
With risk tolerance, for example, alignment means exploring why the client scores the way they do. Getting to root causes opens the door for meaningful dialogue about a client's experiences. These conversations also give advisors the chance to make clear how their services and recommendations harmonize with their clients' needs and goals.
This dialogue can lead to other avenues for alignment. For example, NYLI research indicates women's strong interest in environmentally and socially friendly investments. Understanding exactly what moves and motivates their clients can help advisors spot opportunities to have new conversations and, in turn, support the full range of those clients' financial needs.
High net worth clients are savvy enough to understand how advisors are compensated, so they can quickly grow suspicious if the conversation focuses only on a specific investment product or stock. An advisor who puts too much emphasis on financial solutions alone can come across as having an agenda. But clients want to know that their needs are their advisor's true priority: 77% of respondents told NYLI that it's extremely or very important to choose a financial advisor who "aligns his or her interests with mine."
An advisor who can relate to where a client is coming from, what their goals and priorities are, and what values they hold may find it easier to build trust and alignment. Focusing on core principles or experiences—rather than simply touting training, credentials, or track record—can help to deepen and preserve client relationships.
Ultimately, clients demand strong investment performance. But they increasingly want a personal touch and a sense of connection to go with the data around their portfolio returns. Prioritizing alignment in a client relationship means paying attention to more than just the numbers and taking the time and care to know the person behind them, too.
"New York Life Investments" is both a service mark, and the common trade name, of certain investment advisors affiliated with New York Life Insurance Company.