Investment advisers take note of women’s new clout

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Print this page by Robert Powell

The nation is slowly recovering from a deep recession. Where will it get the boost to have a booming economy again? Warren Buffett has an answer:  American women.

“In the flood of words written recently about women and work, one related and hugely significant point seems to me to have been neglected,” he wrote in a recent essay in Fortune magazine. “It has to do with America’s future, about which — here’s a familiar opinion from me — I’m an unqualified optimist. Now entertain another opinion of mine: Women are a major reason we will do so well.”

Buffett argues that the U.S. has achieved economic success since its founding by essentially running at half capacity. Only in recent decades have women become truly integrated in the workforce.

“The closer that America comes to fully employing the talents of all its citizens, the greater its output of goods and services will be,” writes the Oracle of Omaha. 

Women now make up more than half the labor force but still are underrepresented in many leadership roles in business. That is bound to change because of the pipeline of educated workers coming from colleges and universities.

Looking at this year’s graduates, the U.S. Department of Education expected women to earn 56.7 percent of all bachelor’s degrees, 59.9 percent of all master’s degrees, and 51.6 percent of all doctoral degrees. In sum, DOE anticipated 140 women to earn degrees at some level for every 100 men.

Another way to examine the change taking place is to look at the leadership of the commonwealth’s biggest companies. Five years ago, no woman served as CEO at any of Virginia’s 50 largest publicly traded companies. In 2010, there was one, Nancy Taylor at Richmond-based Tredegar Corp. (No. 39 on the latest Virginia Business list).

Today, there are four women CEOs on the list. In addition to Taylor, they include Phebe Novakovic of General Dynamics in Falls Church, the state’s largest publicly traded company; Gracia Martore at Gannett, No. 22; and Lisa Hook at Neustar, No. 40. General Dynamics and Gannett are Fortune 500 companies.

There is another role in the economy that women are stepping up to fill. They increasing own much of the nation’s invested wealth. 

Tom Nally, president of TD Ameritrade Institutional, notes that women today control about $8 trillion in investable assets, a number that is expected to grow to more than $22 trillion during the next decade.

“That’s one of the demographic shifts in wealth management that we are seeing,” says Nally, who is based in Fort Worth, Texas. He visited Virginia earlier this year to speak at an event celebrating the 20th anniversary of the Richmond wealth management firm JoycePayne Partners. He says that women also stand to inherit more than 70 percent of the money accumulated by the baby boom generation. 

These trends are changing the way financial advisers work with women. According to a recent study by the Insured Retirement Institute, only 30 percent of investment advisers are women.

“Unfortunately in recent history, people have had a tendency to speak directly to men about financial issues and that kind of alienates women. What happened is that many women, as soon as their husbands passed away or they were divorced, they would fire their financial advisers,” Nally says.

The financial services industry has tried a lot of “cutesy things” to attract women in the past, he notes, but many women found these attempts condescending.

“What women really want is to be listened to and heard just like every other individual because they all have different hopes, dreams, objectives, and  they don’t want to be painted with a broad brush just on gender,” he says. “If there is one thing that a person can take away from dealing with a woman versus a man, it’s just listen and understand what she’s really looking for.”

Michael Joyce, the president and founder of JoycePayne, has followed that approach.  He has been named one of Barron’s Top 100 Independent Financial Advisors in America.

“What we’ve found over the years is women are more interested in: ‘How are you taking my objectives and goals and the things I’m worried about in the financial world and working to achieve those goals?’  Not so much:

‘How much did you beat the S&P 500 over the last 90 days?’ ” he says.

Joyce says women who inherit investment decisions from their husbands are often unprepared for the task because they were not kept informed.

“In many cases, they didn’t handle any of these things,” he says. “I had one woman who had looked around and found a little ripped-up piece of paper with some passwords to access the accounts, and that was the only thing she had that was a clue to her financial picture at the time.”

Joyce says his approach for all clients, women and men, is to talk to them about their financial goals. “What are the advantages and disadvantages? Make the recommendation that is best for them and then carry it out or implement it on their behalf. That’s the way we worked it,” he says.

“Just don’t change your brochure to pink and think you’ve got it covered,” Nally adds. “That’s how you get into a condescending relationship.”

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