FWAC Study: Women Breadwinners Want Better Advising

The third “Women of Wealth” report finds advisers miss the mark in how they service these clients.

A “seismic shift” is occurring in our culture—one crying out for service from astute, and caring, advisers, say Eileen O’Connor and Heather Ettinger. The two wealth managers have co-authored a study revealing that the growing number of women breadwinners is being seriously underserved—by their own advisers and the adviser community in general.

“We’re dealing more and more with women in this space,” says Ettinger, a managing partner of Fairport Asset Management. “There’s a gap in how [adviser] companies are supporting, and not supporting, them.” And the women feel it. Sixty-six percent of those  who have advisers are unhappy with them, the study shows.

Still, they believe creating a good working relationship with an adviser is valuable—especially when any major financial missteps could send aftershocks rumbling as far away as retirement.

“Women of Wealth: What do breadwinner women want?”—third in a series published by the Family Wealth Advisors Council (FWAC)—studied 1,074 women who range from partial—supplying at least 25% of income—to sole breadwinner for their family. Seventy-eight percent of these women work full time, 44% earning at least $151,000 annually—9% more than $500,000; 46% have a net worth over $1 million. Of these mainly American women—all invited to participate—74% are married or in a committed relationship; 50% have children. Most are in their 40s or 50s.

Overall, these women manage 75% of their household’s financial-planning responsibilities—one being retirement planning. About 90% handle at least 50% of that duty, and 42% handle 100%.

NEXT: Rethinking the service model


The fact that more women are adopting the heretofore male breadwinner role owes much to the Great Recession, when many men lost jobs they never regained or returned to work at a lower level, says O’Connor, co-founder and managing principal of Hemington Wealth Management. A study from the Center for American Progress shows women are now a breadwinner in four out of 10 American families. Still, attitudes are changing more slowly than the demographic; 40% of respondents said they feel pressure from friends, the community—even family members—to downplay their breadwinner status.

The FWCA’s findings challenge the prevalent product-oriented—i.e., more male-oriented—adviser model for these women who balance their high-power jobs with child-raising, home management and maybe care for aging parents. Besides that, they may serve as decisionmakers for charitable giving, education funding and, not least of all, retirement planning. The combined result is stress, the study says. When they turn to advisers for help, though, they are often disappointed.

Women want advice that considers all their involvements—that is served up holistically and particularized to their needs. Products might be the last thing they want to think about, says Ettinger. The study suggests a different approach is needed—from discovery to delivery. For instance, these top managers/mothers/caregivers have scant time to meet separately with various plan advisers and plan sponsors, she says. Consolidating adviser meetings would be useful. In a retirement planning context, this might mean a retirement plan adviser would team with a wealth manager or registered investment adviser (RIA) as a way to reach out to these women, Ettinger says.

NEXT: Why not products?  

They also want advice that takes into account their struggles—possibly why discussing technical investment products is a low priority. Instead, the women wanted to talk about strategies to achieve their goals and address their concerns, Ettinger says. “Seventy percent of widows change advisers within the first year of their husband’s death,” she observes. The widow’s late husband discussed products with the adviser. When that person calls her, he likely attempts the same. “Her issues are ‘Am I going to be OK?’ To her, investments are way down on the list.” She often prefers a woman adviser, because of “the empathy factor,” Ettinger says.

But it wasn’t just widows who found their advisers lacking. Breadwinner women in general gave them mediocre marks—“an average of ‘5’ on a satisfaction scale of 1 to 10,” the study reported.

Surprisingly, with so much focus on their family, breadwinner women in general showed no preference for women advisers over men. Their main criteria were that the adviser “see what is unique about my family, be able to consider all the dynamics and moving pieces and parts in it, and to understand that picture,” Ettinger says.

Trust was also key. Divorced women in particular distrusted advisers. “They seem to the most sensitive about fees—the most focused on them,” Ettinger says. They also tend to be the least well off and have lower income than the others. They often feel vulnerable. “When they go through a divorce, some of the advisers they work with aren’t necessarily working in their best interests,” Ettinger observes. Divorcées especially need assistance, possibly in the form of a financial planner, she says.

NEXT: Single breadwinners most at risk

Many women receive no adviser help at all. According to Center for Talent Innovation statistics noted in the report, 44% of women earning more than $100,000 a year and worth at least $500,000 had no adviser. Of those below age 40 in that group, 76% had no adviser.

Single women were least likely of any group to work with an adviser. The study shows they also could be the most at risk in retirement. Never marrieds lack the advantage of a husband’s Social Security benefit or pension, and, as they are sole breadwinner, long-term illness is a threat. An adviser can help them determine how, as best as possible, to maintain their standard of living in that life stage, factoring in possible costs of health care and housing.

While about one-third (35%) of respondents were financially savvy, those without financial knowledge—even those who work with advisers—often found investment decisionmaking overwhelming; about 70% “relegated financial planning to the back burner.”

Making timely decisions is important, however, especially in retirement planning, with compounding at stake. If defaulted into their company’s 401(k) plan, the women might later find the investment strategy had been too conservative, Ettinger points out. “This woman actually should be very aggressive in her retirement planning. It’s the last money she’ll have.”’

NEXT: What she wants from her adviser

To make such decisions wisely and confidently, breadwinner women need education, but generic provider materials will not suffice. It should be in the form of “simple, direct and personalized guidance to address their needs,” the study says. Otherwise, the women were not interested. As one respondent to the survey wrote: “Most valuable to me is just spending time discussing my individual situation and getting my questions answered. I’m not terribly interested in generalized market advice.” And another: “I am so busy and stressed. If you could … look at all the information I’m sent and pull it together in an integrated picture and tell me what to do (with your rationale), I would be grateful.”

The adviser needs to make sure his client fully understands the various financial vehicles such as 401(k)s, 403(b)s and individual retirement accounts (IRAs), and individual strategies, such as asset classes, risk tolerance and time horizon. Equally, his presentation style has much to say. This should be clear and without condescension. Sometimes in meetings, advisers will talk over the women and disregard what they contribute, Ettinger says.

Ultimately, every major financial decision today will affect their life once their breadwinner years have passed. Working closely with a good adviser can increase their confidence in ending well.

Advisers wanting to pursue these relationships should aim for the following, the study concluded:

● Understand clients’ interests, fears, knowledge level, uncertainties, goals, third-party influences, risk tolerance levels and values;

● Provide a team approach that includes members of various ages, both genders and myriad skills;

● Proactively coordinate all relevant parties;

● Offer frequent communication; and

● Anticipate needs, respond to changes and ensure financial security in retirement.

The FWAC is a national network of independent, fee-only wealth management firms.