Women tend not to want to grow their wealth just for the sake of a few percentages, they want to meet specific goals, be it a secured retirement, paying school fees or taking care of their elderly parents.
As a financial planner, I rarely talked about investment returns when meeting a new client; I wanted to understand their aspirations and talk about how well (or not) we were placed to meet those aspirations.
In review meetings, little time was spent on portfolio performance as the key question most clients wanted answered was: 'Am I still on target to meet my objectives?'
Here the focus on holistic financial planning rather than financial products is crucial. Many advisers effectively use cash flow tools to bring financial plans to life and that too can be very powerful.
However, please remember that while cash flow tools are a useful mechanism, a cash flow by itself is not a financial plan.
Investing: risk vs reward
Women are often said to be risk averse or lacking in confidence, retaining a much higher level of cash savings than men or choosing to tie up their money in property rather than stocks and shares.
Women, in my experience, are considered risk takers; they do not lack confidence as much as information and they tend to take calculated risk rather than chase performance just for the sake of it.
They also do not want to take big risks with what they see as their core security – whether that is their home or school fees for their children.
They will, however, happily take risk with funds they feel they can afford to lose or take a long-term view on.
About 50 per cent of landlords are now women, which is understandable given that women make up just over 50 per cent of the population. They know that investing in property is not without risk but they are happy to invest because they are comfortable with the risk versus reward matrix that property offers.
Women often do not invest in stocks and shares because they do not always get the opportunity to reach the same understanding of risk versus reward when talking with advisers.
Advisers need to switch from a sales, performance-driven approach to one of communicating information in plain English so women can reach a point where they have all their queries answered and concerns addressed.
Pink marketing
Despite reams of research into female wealth, with the exception of a few firms who are advanced in their approach to serving women clients, most firms focus on 'pinking' their marketing campaigns rather than fundamentally reviewing their products or services to better serve women.
