What You Need to Know About the Differences in How Men and Women Make Financial Decisions
by Holly Buchanan
Bill and Margaret are meeting with their financial advisor for the first time.
Bill is thinking:
"What kind of return can I expect on my investments? What opportunities will you identify that I may not know about? I could probably do the investing myself. How can you deliver better results than what I can do on my own? What expertise do you bring to the table? What's your strategy?"
Margaret is thinking:
"Who are you and what are your values? Do you have our best interest at heart? How much communication can I expect? Will you make trades without consulting us first? Can I come to you with questions? Will you simply provide recommendations, or will you educate us about our options? How will I know if the advice you give is really right for me and my family and our specific situation? Can I count on you to pay attention to our money? I don't have time to stay on top of the market."
Men and women may buy the same financial products and services, but they often buy for different reasons. Even when it comes to choosing a financial advisor, they can utilize different decision-making processes. Understanding these differences can make a big difference in the quality and success of your relationships with both your male and female clients.
Not all women think alike and not all men think alike. You may have female clients with a more male decision-making style and men with a more female decision-making style.
By understanding and accommodating both styles you can be more successful with all of your clients.
Making It Grow Versus Making It Last
In a study conducted by Colin Camerer at the California Institute of Technology, brain researchers put men and women in an MRI and monitored their brains as they made investment decisions. In men, the reward center of the brain lit up. In women, the reward center lit up, but so did the consequence center.
Men are traditionally focused on making money grow, and getting the best return possible. Women are focused on getting a good return as well, but they are also looking at longer-term consequences. Women are known for being more risk averse. I think women are simply more risk aware. Add to that the fact that, statistically, women outlive men, and you understand why women are focused on making money last.
I recently read about a couple who were talking about their retirement account. He was upset because the market had gone up nearly 30 percent, and their portfolio had only gone up 10 percent. She was comfortable with the 10 percent return because they had a long-term plan that mitigated risk. She was okay with a lower return if it meant more reliable, long-term security. (Wouldn't you like more clients like that?)
What You Do Versus Who You Are
What criteria matters most when a couple is choosing a financial advisor? For men, it's important to state your credentials, your experience, and your track record. You have to answer his unspoken question, "How will I be better off financially if I work with you? What skills/knowledge/connections do you bring to the table?"
Women are asking that question as well, but they are also focused on whether or not they can trust you. You have to answer her unspoken question, "Do you have my best interest at heart?"
I talked with a very affluent woman and asked her why she chose her financial advisor. She said, "Because he coaches his daughter's softball team. And that sent the message that he cares about raising strong daughters."
Women want to know who you are. One great way to build trust is to share your values. Why do you do what you do? What's the best part about working with your clients? Share those answers with your clients and your prospects.
You also have to know who she is. A great trust-building question for women is, "Who are the most important people in your life?"
Of course, the number one way to build trust is to listen. Many women I surveyed felt their advisor didn't listen, didn't ask enough questions, or know enough about them to truly know what their best interest was.
Taking Action Versus Thinking It Through
Women have been accused of not being able to make up their minds. Let's clear that up right now. It is not that women cannot make a decision; it is that they often have a more deliberate decision-making process.
Women tend to have a longer checklist of what matters. They have more questions and more concerns that need to be addressed. This is even more true if they are feeling stressed. With men, it can sometimes be the opposite. If men are feeling stressed, they want to make a quick decision and take action.
How does this play out in meetings with clients? Have you ever been in a meeting, about to make a decision, and the woman says, "I need more time to think about it." That phrase usually means one of three things:
- She has questions that have not been answered.
- She has concerns that have not been addressed.
- She is giving you a polite "no."
How do you know which one it is? Simply reply, "Take the time you need to make a decision. And let me know if you have any questions I haven't fully answered, or any concerns I have not addressed." If she is missing information, find out while she's still in your office.
Note: For men, it's helpful to have an agenda for your meetings so they know the goal(s) and what will be accomplished. End your meetings with actions steps—yours and your client's.
What Women Want From Their Advisors That They Are Not Getting
In my 2010 research study, I asked women, "What is the number one thing you would change about your relationship with your financial advisor?" The number one answer was, "More communication." The number two answer was, "He or she would provide more education." The majority of women wanted that education delivered in one-on-one meetings with their advisors. Make her feel smart, and she will be your biggest supporter.
If you understand both male and female decision-making styles, you can incorporate strategies to meet the needs of both into your prospecting and meetings. The end result is stronger relationships with all of your clients.
© 2014 Holly Buchanan
Holly Buchanan is the author of Selling Financial Services to Women—What Men Need to Know and Even Women Will Be Surprised to Learn. She is the co-author of The Soccer Mom Myth.
Buchanan Marketing helps financial companies and professionals increase their bottom line by being more successful in attracting, marketing to, and selling to women and couples.
Holly Buchanan has worked with hundreds of clients including Genworth Financial, TD Wealth, Fifth Third Bank, US Bank, Summit Credit Union, York Traditions Bank, Dividend Capital, Brokers International, and Great-West Life.
When she isn't helping clients you'll find Holly on a stand-up paddle board, or eating twice her body weight in sushi.
Contact Holly at firstname.lastname@example.org
Find out more at www.SellingFinancialServicesToWomen.com
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