Sara Routhier, Managing Editor of Features and Outreach, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming worl...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Jan 29, 2013

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A voice is growing louder in the financial industry.

Women are continuing to increase their hold on both the overall economy as well as their own personal finances.

Some financial advisors are well aware of this female-oriented transition, whereas others are still treating their female customers in the exact manner as they do men.

But as recent research finds, women’s control over their finances is a sector of the global economy that can no longer be ignored.

Financial Growth From Women

Kathleen Burns Kingsbury, author of “How to Give Financial Advice to Women” and founder of KBK Wealth Connection, discovered that women are set to continue expanding upon their economic status in society. In her book, she wrote that over the next few decades, women will inherit about $28.7 trillion in assets as a result of intergenerational wealth transfers.

In addition, more women are putting that money back into the economy and establishing future wealth for themselves.

Kingsbury quoted a recent report by the Center for Women’s Business Research which found that female-owned businesses are growing at twice the national rate.

Even in the home sector, women retain the majority of the financial power. According to the Center for American Progress’ Shriver Report, women are responsible for 80 percent of consumer-buying decisions. But even though they dominate the spending power, they are not always viewed by society as the decision-makers.

And this is extremely apparent when financial advisors meet with couples.

Kingsbury said that in meetings, some females will remain quiet, either because they are processing information or because they are letting their husband be the “public face” of their households.

She said that in reality, some of the women make the financial decisions and are overt about this role. Other times, women are quiet and ignored during the meeting, but in the end, the financial advisor is “fired on the car ride home.”

‘Personality is Paramount’

Michael D. Cohn, a NYC-based independent account investment advisor, told loans.org that 70 percent of his clients are female.

Cohn said approaching men and women varies in large ways and it becomes a “double-edged sword.”

For women, Cohn said that if a financial advisor is recommended to them by a trusted friend or relative, they are willing to extend that trust.

It is the opposite for men.

“They look at everyone kind of sideways for the most part,” Cohn said.

Even the meeting venues are different for the majority of Cohn’s clients.

Cohn said he can meet with his male clients over drinks or food. For his female clients, gaining trust and understanding a financial advisors personality is paramount and can take more time.

“They like you to look them in the eye,” he said. “Personality and the way you seem to them is more important to a female than a guy.”

Kingsbury’s book findings are similar to Cohn’s personal experiences.

She said the most surprising find from her recent book’s research was a communication disconnect between financial advisors and female clients.

“It wasn’t that the financial advisors weren’t listening but they were listening in a different way,” she said to loans.org.

According to Kingsbury, 80 percent of financial advisors are male. She said their male neurological and societal upbringing is to fix the problem, whereas women want to talk beforehand.

“Men listen to fix problems … They are really into ‘fix-it’ mode. Women want a conversation and a dialogue before they jump into problem solving,” she said. “Neither is right or wrong, but they are different.”

Kingsbury said that even she gets lumped into this set-type, but she is able to see strength in both genders.

“I admire my guy friends’ ability to compartmentalize. As a woman, it is hard to draw the line,” she said.

Making the Gamble

Men and women’s views on how a meeting should operate also transcend to how they invest their money.

Cohn said that men are open to ‘get-rich’ schemes. Cohn said women are never into these types of investments.

“Women are much more worried about losses than gains. Men are more worried about gains than losses,” Cohn said.

The one client that brings Cohn the most difficulty is rich, successful women. He said once females transition to a rich economic standing, they tend to micromanage more than necessary.

He said that although he doesn’t understand their desire to micromanage, it “comes from the fact that successful women are much more wary of being taken advantage of … less likely to trust based on a warm and fuzzy feeling,” he said.

Rich men, however, are willing to take a necessary risk when investing.

“They are aware of what it means to invest. They will actually spend less time micromanaging, trying to micromanage something that is a small portion of their big picture.”

Even though some clients strain Cohn, he believes that a desire to question is a positive trait in an investor.

“I actually appreciate people inquiring about what they are investing in. It keeps me sharper, in essence, to make sure I have a rational explanation for everything I am doing,” he said. “I like having, to a degree, people who know what they are investing in. And that, more often than not, are my female clients.”

But gender norms do not always follow in an exact pattern.

Kingsbury said that regardless of gender stereotypes and studies about the financial industry, they are merely a starting point, not an ending point for dialogue.

“We need to make sure we don’t put women into homogenous little groups,” Kingsbury said.

For all of the stereotypical men that like to make risky investments, there are women they are “just as open to risk as men,” she said.

A Financial ‘Boy’s Club’

John-Paul Valdez, a personal financial expert for Pearl.com and former financial radio talk show host, told loans.org that he wants to approach all of his clients fairly because anything else is “essentially discrimination.”

Valdez said that although he is male, he is a minority gay man, and wants treat his clients more openly.

“When I approach a client, it is different than at Morgan Stanley Smith Barney.”

At these large financial organizations, Valdez said there is a lot of prejudice against women because “it is a boy’s club.”

“It is built in our society as though women don’t know anything about finance, which is absurd,” he said.

Valdez said the ability to deal with finances is not based on gender. But it does not keep some crooked advisors from misleading women.

“What happens with women clients, if they are alone, men will prey on them. They will use their position in society … to sell them a bill of goods.”

Valdez makes sure that his clients are “consumer savvy” enough to notice when an offer seems wrong, such as an eight percent guaranteed return in the current market.

He said a deal such as that is just not available right now.

“If something doesn’t feel right or look right, get a second opinion,” he warned.

But some are not so lucky. For those currently signed into a bad financial deal, there is still a way out, or up. Clients can complain against a financial advisors’ license, or U-4, which can affect an advisor’s potential to make future sales.

Once a consumer notifies the advisor that a formal complaint will be made unless they resolve an issue, the advisor will be more likely to act in a professional manner, and even resolve to fix the financial issue.

At a Tipping Point

Valdez believes that one of the main causes of financial confusion for both genders comes down to unnecessary jargon.

Valdez said most financial terminology should be easily reduced down to a simple concept, understandable for any high school graduate. He said terms such as bonds can be defined in one short sentence.

“It shouldn’t be so complicated,” he said. “A lot of financial people like to scare you with how much they know. But really it’s about how much the clients know.”

In the end, the clients are making and keeping the financial decisions, not the advisors.

“It’s not about a sales job,” he said.

Kingsbury believes the financial world can be improved by leveling the playing field. She said increasing the number of female advisors in lead roles, will ensure that everyone is heard.

“The wealth industry was created by men, for men,” she said.

Changing the status quo and increasing the number of women would help to ensure that both genders are represented.

“I think that some women work better with women and some work better with men,” she said. “Having both genders available is really the most useful.”

With the influx of money backed by women, there is no longer a way to ignore their economic influence as a whole.

“We are at a tipping point where we realize we need to do a better job,” Kingsbury said.