Using Financial Education as a Passport to Better Client Relationships with Female Clients

The ability to help clients better understand markets and investing is a highly sought-after attribute among financial advisors. By providing educational services, advisors can build stronger relationships with all clients—and especially with high net worth female investors.

Women and Investing: An Education Gap?

Despite controlling more than half of America's personal wealth, many women feel their lack of education about financial markets hinders their investing decisions. Twenty-five percent of those surveyed by New York Life Investments (NYLI) believe they have less access to financial education, and only 56%, on average, are confident in their knowledge of the markets.

"I feel awful because I really wanted to learn everything about stocks and finances but I still haven't learned—life has gotten in the way," said one survey respondent. "Women have often been excluded from the education necessary to make investment choices," said another.

And it's not only women. A 2019 study co-led by the FINRA Investor Education Foundation characterized US investors' financial knowledge as "alarmingly low." Increasing that knowledge would empower investors and enable them to take on a more responsible, active role with their advisors.

Importantly, 86% of women investors are confident in their ability to make decisions if they receive sound advice, suggesting the problem isn't one of self-confidence but rather a lack of knowledge to make informed choices.

Accessing this kind of education can be difficult. Thirty-two percent of women who don't work with an advisor say it's challenging to find reliable information about investment products. But those who do have financial advisors are looking to them for educational content to help them direct their financial futures.

For advisors, this represents an opportunity to better serve their clients—and boost their own profiles. Offering educational services can serve as a form of indirect marketing and lead to client attraction and retention.

Tailoring Educational Services for Women's Needs

Advisors can help clients—as well as their families and friends—gain investment knowledge through courses, events, and other strategies. According to ThinkAdvisor, investor education should go beyond slogans or reactive education, such as simply answering questions. Instead, it should provide foundational knowledge to clients.

Women tend to be most satisfied with financial advisors who offer them holistic, personalized advice, and this is true of educational services, too. Such services should be designed with each client's complete financial situation and individual responsibilities in mind.

This is key because 62% of NYLI survey respondents believe women have unique needs when it comes to investing, and only 33% said their current advisor recognizes and deals with those needs "extremely well." For example, on average women live longer than men and need to save for longer retirements, but they're often paid less, lowering their lifetime earnings potential. Financial advisors who understand their female clients' unique challenges can better address them in the educational services they provide.

Financial education should be client-led, and advisors should ask the women they work with what topics they're interested in learning about. Many, for example, seek to gain the knowledge needed to help their children learn to make sound financial decisions.

Educational opportunities and services should go beyond one-off meetings. If a client is unclear about something, advisors should source additional materials and follow up with the information later. If a question comes up that falls outside of an advisor's area of expertise, they could introduce the client to a subject matter expert.

The way advisors deliver education is equally critical. Women in the NYLI study demonstrated a significant interest in participating in informational events and courses, and more than 40% prefer in-person learning over online classes, discussion forums, or social media groups. Of note, the vast majority of women surveyed value direct language and transparency, with 93% agreeing it's extremely or very important for advisors to find an advisor who "speaks to me in language I understand."

Advisors should also consider combining financial education with social or networking events. Bringing women together in this way further empowers them and enables them to build a sense of community among other investors.

Building stronger education into financial advising relationships can help create better relationships with clients in general and women investors in particular.