Why women just aren't buying what financial advisors are selling

This article rings completely true.

As someone who works in the “trust business” (I’m co-author of The Trusted Advisor, author of Trust-based Selling, founder of Trusted Advisor Associates), there are three businesses that ought be perfect territory for trustworthy salespeople: accountants, pharmaceutical reps, and financial planners. Unfortunately, only the accountants come close to fulfilling that potential.

The usual culprits are identified by author Shidler: a tendency to sell, and an inclination to think that trust is about credentials and data.

Of all the above-cited businesses, perhaps the most intangible of all is financial planning. This makes it an extremely emotional purchase for men and women alike—women just have less hesitation about admitting the emotional nature of the buying process.

What the women Shidler speaks are demanding is not data per se, but the clear sense that the data is being provided on-demand, without bias, in an open and transparent manner. Instead, they are given the impression by too many planners that the data is being carefully meted out, with an eye to how it will make them look. This just fosters more suspicion.

The good planners know the paradox of trust: if you simply serve your client by helping them make a decision that is best or them—and not focus on selling them a product or service—then you will earn their trust. If you earn their trust, they will buy your services and place their assets with you. But only if—paradoxically—you are prepared to serve their interests at the expense of your own.

Talking about your track record is a waste of time. Would you want a blind date to talk about their last 17 dates? It’s the same with the financial business; a client wants to hear you talk about their life, not someone else’s. Yet planners persist in bragging about their success with strangers. No wonder women don’t buy it.

Far too few people in the financial business are willing to make this simple trade-off—do right by the client and the client will do right by you. They are far too inclined to follow another rule—do unto others before they do unto you. I have watched far too many funds wholesalers as they approach planners—the pitch is always “look how much commission you can make on this product.” Too many planners then put clients into inappropriate funds—which manage to make the managers well-paid, at the expense of clients.

It’s ironic that companies like Dimensional—which actually encourage the kind of open thinking I’m talking about—don’t get enough press. But understandable, because the sellers don’t make as much off the sale.

Until advisors figure out that to be trusted, they must be trustworthy, Ms. Shidler will have to keep writing the same sad article.

Great article! Most research shows that women are more conservative investors. They do more research, compare more advisors before choosing one, and make few trades. Thanks for the added insight about women focusing more on trust and less on performance history when compared to men.

Charles, thanks for your insightful comments. Unfortunately, you’re right it seems that many advisors do push the sales and it leads women to be skeptical. As a reporter who speaks to dozens of advisors on a weekly basis I will tell you, I feel optimistic. The advisors I speak with are seem quite concerned with all of their clients issues and make it a point not to push sales. But unfortunately, as a female investor I’ve first-hand experienced concerns with my own “advisor.” I always felt that he was trying to push product and he calls like clockwork at the same time each year. He doesn’t call when the market was falling apart to see how we’re doing. Basically, from my perspective it seems he’s only calling to see if we have more assets to roll into an IRA, etc..
So, I think that there are clearly great advisors out there, but unfortunately a lot of women investors encounter advisors who don’t appear to be trust-worthy. What happens then is ultimately women do more research and will find a better advisor the next time.

Too many advisor try to push products, and all people are weary of being “sold too” — but perhaps women are more weary of it, since they probably receive more offers and deal with more pushy salespeople. An advisor should do what his/her job title states: advise. That means not pushing a product or a particular investment, but instead make the primary mission to listen to the client and understand her needs.