Women & Legacy Planning

Sins of Omission and Commission

by Tony DiLeonardi

My wife is the clear CFO in our family. It took us several years of marriage to figure this out but she manages the money in our family. Even though I have spent much of my career in financial services, Diane controls the checkbook. She is gifted with an eye for detail and well organized. She also happens to be prudent and frugal and enjoys the responsibility more than I.  We of course make investment decisions together and often discuss tactics, plans and goals. But basically she controls the money flow, both short-term and long-term investments for our family.

Unfortunately, most people assume the opposite.  Some would be highly embarrassed if they knew the error of their assumptions.  For example, our family makes regular contributions to a particular missionary organization.  Each year, my wife Diane, writes, signs and mails the check.  Yet, I get a personal thank-you card annually addressed to me and written to me alone.  We are grateful that a key leader takes the time to write a personal thank you.  Unfortunately, every year it's obvious that he believes I have written the check.  At first it was humorous, but over the years it's become annoying.

It's not just non-business people who make these mistakes.  I have had financial advisers send just me notes and cards when they knew it was a joint account with Diane. Unfortunately, these missteps are too common.  The female advisers I have spoken to are frequently approached by women clients who've had bad experiences with male advisers.  Unfortunately, there is nothing in financial services training that teaches advisers how to deal with the human side of the business.  This lack of relationship training has a negative impact on the bottom line. 

So what? Because of this fact some professional sales and service providers might be sadly mistaken and rather embarrassed if they continue to think that I (the man) make all the investment decisions. The data says otherwise. I have heard many stories from financial professionals of when this assumption has occurred. It's embarrassing for the sales professional and I am convinced in many cases, unintentional.  There certainly are sins of omission and sins of commission, but the bottom line is that ignorance can no longer cover this drastic oversight.

I'm here to tell you that my wife and I are not unique. The data is clear and getting stronger that the American female is currently controlling the assets both in the family and independently. It's not just purchasing power - we already know that to be true. But rather the investable assets she controls represents the majority of wealth in the U.S. for the first time. According the U.S. Census Bureau, American women control 53 percent of all investable assets, which is roughly $14 trillion.

Moreover, today there are more women working than men and more women are graduating from U.S. colleges than men. In addition, due to higher life expectancies for women over men and higher divorce rates, more single women are controlling wealth in their senior years than ever before.

What does this mean for you the wealth sales and service professional?  Perhaps more pointedly, what does it mean for the male financial professional? Today in the financial services industry, female advisers make up less than 20% of the registered professionals.  I think it means we (as an industry) may need to change our game plan. Generally speaking (and I add with great caution to a delicate topic) male advisers either have not seen the data that supports this new world financial leader or don't know what to do about her -- or perhaps both. If that's the case, this is your chance to understand the opportunity, challenges and positive outcomes in store for you-that is if you can change old paradigms and prepare to genuinely and effectively serve the female client in a meaningful way. Perhaps it's time for a new perspective.

Think about this data:

-Women will inherit 70% of the $41 trillion in the intergenerational wealth transfer expected over the next 40 years

-If a woman reaches her 50th birthday without cancer or heart disease, she can expect to live to age 92

-74% of women are single when they pass away

-75% of caretakers of elderly family members are women

Consider this word picture. Working almost exclusively with the man in the joint accounts you manage is like creating a football game plan to win by building your entire game plan around the New England Patriots quarterback, Tom Brady. You may think you have created a winning financial wealth and life game plan to be in position to win with Brady (it certainly seems easy with him) but the fact is, he will not even be in the game for the fourth and final quarter. You will have to win without Tom Brady. Why?  Because he will be dead (statistically). The quarterback of the family wealth in the final quarter will be Mrs. Brady, and you better hope that she thinks you care for her and have her best interests in mind.  The data today indicates she doesn't believe that you do! As a matter of fact, she does not think our industry has her best interests in mind. 

So, how can you rethink your strategy?  The following comes from the book The $14 Trillion Woman (BookSurge, 2009) and are three quick actions you can take now:

1.  Change the language you use and the audiences you use it with.  Speak straightforwardly and honestly to the female client. Remove jargon. Address her, look her in the eyes and watch your body language. Transparency builds trust.

2.  Consider adding a female wealth professional or assistant to your team who may be better positioned to solicit the trust and confidence of the female client and prospect.

3.  Spend time determining what specific female client/prospect you want to focus on.  Is it the young professional?  Divorcees? Widows? Seniors?  Be sure you have put the proper work into who your ideal female client is.

Be open to the possibility that this opportunity, if addressed with seriousness and genuineness, may change your production forever.

(This is an excerpt from the soon-to-be-released book titled  Creating Life-Long, Multi-Generational Wealth: Stories of The Intimate Adviser.)