Gillian Hepburn | Four disconnects between advisers and their female clients

Previous research that was conducted some time ago suggested that by 2025, women would control 60% of the UK's wealth. This would largely be due to wealth transfer within the baby boomer generation, typically from male spouses or partners to females.

While this prediction remains unproven, HMRC data for 2020/2021 shows that of the £15.7bn of estates that transferred to a single partner, 73% went to women, lending credibility to the theory.

So why should advisers take note? Here are the key disconnects to consider:

1. Retention: In the survey of 200 women, only 34% said that they would remain with the family adviser post death of a spouse or on divorce. However, advisers expected 62% of these women to remain. For advisers planning to exit businesses and maximise valuations, losing wealth as it transfers could undermine their strategy.

2. Satisfaction: Are women satisfied with the service from their adviser?  It's crucial to understand which services female clients value and assess their satisfaction levels. Unsurprisingly, women in the survey valued trust, peace of mind, goal delivery, and discussions about both financial and non-financial needs. These align with advisers' views on what their female clients value. However, advisers' perception of how dissatisfied their female clients are with each element of their service differs widely from what their female clients report:

This indicates that there are some challenging gaps to close and advisers should consider strategies to achieve this. It was also interesting to note that when women expressed what their non-financial goals were, they were often related to financial capability: travel more, spend time with family and leisure activities.

3. Involvement: Past research (Source: Eliza Filby) indicated that women were disengaged and not involved with the process of financial planning pre-widowhood. Interestingly, they blamed both their partners for excluding them and advisers for not engaging them. Our research suggests that they may be right to hold this view.  45% of advisers said their primary contact was with the male partner, only 22% said that both partners were always present at meetings and less than half said that their professional relationship was equal with both partners. 66% of advisers also said that it was difficult to some extent to engage with both partners.

Why is it difficult to engage both partners? Perhaps the next disconnect might partly explain this.

4. Financial requirements: Women have different financial needs. When asked about product requirements only 46% of women felt adequately protected for sickness (primarily private health) but over 60% of advisers thought their female clients were. The same applied to critical illness coverage.

Interestingly, 82% of women felt prepared for death, but only 57% of advisers agreed, suggesting a need for better engagement on this sensitive topic.

Advisers might consider engaging with partners individually, based on their unique planning requirements. For instance, women outnumber men in care homes by a ratio of 3:1 and typically stay more than four times as long. Anyone who has witnessed a family member moving into care knows it can be an emotionally challenging time, and navigating the financial implications can be equally daunting.

On a brighter note, while many women are not staying with their financial advisers, the women in our survey offered some advice on what could dissuade them from moving. They expressed a desire for advisers to 'understand me more,' 'deliver proactive communications' (tailored to their needs), and 'listen more.' This seems quite manageable. Interestingly, the majority of female clients (76%) stated that the gender of their adviser was not important, which is fortunate given that only 16% of advisers are female according to FCA data.

For the 70% of advisers who are actively seeking more female clients or plan to do so, understanding these points could be beneficial. In conclusion, the potential loss of female clients poses a challenge for some advisers but also an opportunity for others.

*Gillian Hepburn is Commercial Director at Schroders.