Women, Money, and Power - Report Example

Running Head: Women, Money, and Power Women, Money, and Power BY YOU YOUR ACADEMIC ORGANIZATION HERE INFO HERE APPROPRIATE HERE Women, Money, and Power Introduction Nearly two-thirds of today’s U.S. labor market is comprised of women and over half of these female, degreed professionals are out earning their husbands salary for salary. Further, it is estimated that women, by 2010, will dominate the control of wealth in the United States. However, the recent Allianz Women, Money and Power study, a quantitative research investigation designed to uncover various personality traits of women, discovered that 90 percent of respondents feel financially insecure despite their growing influence in both society and the labor market. What this represents is a significant divide between increased female successes and their perceptions of financial independence, thus providing a tremendous opportunity for dynamic financial advisors to provide assistance and support in their path toward financial freedom. Segmenting by Financial Personality Understanding what motivates and drives the contemporary woman was the underlying basis for the Allianz research study so as to create a series of demographic profiles based on personality constructs and concerns over issues of finance. Half of all women surveyed indicated a somewhat irrational fear of losing everything and living on the streets, with a significant margin of these respondents earning $100,000 or more annually. Women are largely more secure in non-financial lifestyle aspects, thus it becomes the role of the financial advisor to bridge the gap between finance and perceptions of security and offer support to assist them in long-term financial planning as a portion of relationship marketing. The study uncovered five specific financial personalities toward money and investments, categorized as the Financial Initiator, the Financial Analyzer, the Financial Collaborator, Financial Avoider and the Financial Dreamer, each segment maintaining unique characteristics. The Financial Initiator is highly knowledgeable and asks sophisticated questions. This particular market segment thrives on the power to understand solutions and implement decisions, thus making this financial personality cooperative and relatively easier to appease. The Financial Analyzer does not maintain adequate knowledge of the investment processes and is highly analytical in their approach to finance and further maintains the highest levels of investment assets. Because this segment is not impulsive, women befitting this category will likely expect superior financial service provision. The Financial Collaborator values relationships with the financial advisor, focusing on trust and cooperation as desired characteristics of a competent financial advisor. This segment will likely demand their partners’ inclusion in the financial planning process as this market maintains significant ties to the importance of cooperative relationships. The Financial Avoider is often intimidated or otherwise anxious over financial issues and maintains little practical knowledge of these processes. This segment is often unrealistic and may see herself as the victim in matters of finance. This represents a rather difficult market to satisfy as their approach to finance and investment is rather inconsistent. The Financial Dreamer is often in denial and believes everything financially-related will simply work itself out because “it just has to”. This individual segment refuses to face up to financial obligations simply to avoid unpleasantness at all costs. This market will generally not seek out the services of the financial advisor and, when utilizing such services, will rarely ask questions as this market would prefer to be simply taken care of. It was highly crucial to this study to identify these five financial personalities as each will provide the financial advisor with the necessity to approach investments and individualized financial discussion based on personality constructs and lifestyle preferences. To successfully understand what drives the Financial Initiator, it is important to recognize that this segment will generally make rapid decisions regarding investments and expects direct answers to their questions. In many respects, this segment is likely the most sophisticated market requiring less advisor interventions, thus making this group the desired client in terms of reducing labor-intensive relationship-building exercises to maintain their business. The Financial Analyzer will not decide on a final investment decision until all of the potential alternatives or contingencies have been analyzed. In many respects, this client profile represents a more difficult customer to service as they will likely require significant action on behalf of the advisor in preparing the appropriate consultation package to satisfy this market. Thus, when dealing with the Financial Analyzer, it is important to recognize that slow decision making is a likely outcome of client relations. The Financial Collaborator finds it difficult to separate emotions from financial decision-making, however this market may be prone to making rapid decisions when they perceive they are on the same frequency as the advisor. Thus, this market is best suited to an advisor who can balance the psychological with investment rationale. The Financial Dreamer seeks to understand investment options which have been proven successes for other clients and is often slow to make decisions. Further, this segment wants to understand how solutions will minimize risk, making their ideal financial advisor an individual who is prepared to explore multiple investment alternatives in order to provide one which minimizes any client negativity regarding potential losses in the investment program. Adapting to Client Needs Understanding what drives the client is the cornerstone of building quality financial relationships with a variety of differing women customers befitting the aforementioned financial profiles. In order to fully understand the category of the new client being serviced, the financial personality worksheet is the most viable solution. This worksheet will consist of seven specific questions and will be presented to the customer in order to measure aspects of expected communications and overall investment approach. Existing clients require less investigational tools to determine personality and it is suggested that the advisor should merely assign a financial profile by matching pre-existing knowledge and experience with what drives the client. Personal life events, such as the purchase of a new home, retirement or career planning (amongst a variety of others), creates opportunities to service the financial needs of women clients. Utilizing the retirement aspect of life events as an appropriate example, it is suggested that the financial advisor draw out elements of the individual’s life story about perceptions of retirement goals or lifestyle preferences. Such discussions tend to draw out client values regarding fears, hopes or generic values pertaining to retirement so as to allow the advisor to recommend a viable solution congruent to the client’s unique values. It becomes the role of a successful investment advisor, in this scenario, to position themselves as a lifestyle agent, offering continuous support through various life events and helping to create a proactive, long-term investment strategy. Promotional materials and activities, additionally, create quality marketing efforts to appeal to these five different financial personalities. Such efforts include the creation of seminars catering to the needs of women, “bring a friend” client events, communicating to women’s groups and similar organizations, as well as direct mailings. The aforementioned marketing activities are designed to foster relationships with a wide variety of prospective female clientele and illustrating that the advisor understands the lifestyle needs of women. This, in turn, creates satisfied clients who will generate twice as many introductions as male clients, thus capitalizing on word-of-mouth as a viable marketing tool. Conclusion The Allianz study uncovered that when working with female clients, it is crucial to connect with them for life by changing your approach from “completing transactions” to “establishing connections.” Building strong relationships with female clients is what can help you build a long-term and profitable practice. The basic trend for the contemporary female investor generally befits one of the five investment personalities, thus there is a viable solution to satisfy each and every personality construct in the difficult business of financial planning and strategy. Read More