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In the final analysis, Dan's confidence borne of providing good financial advice for 17 years proved meaningless. Marcie's email absolutely stunned him:
Dan, thank you for the 17 years of service you provided to Phil and me. However, now that my circumstances have changed, I have decided to work with another financial advisor. Please expect to receive the transfer paperwork shortly.
It hit Dan hard.
He thought to himself, "I never realized there was a problem with the relationship." His judgment of the circumstances, of course, remained flawed. In fact, his services weren't terminated because of a problem with the relationship. Rather, he was jettisoned because, insofar as Marcie was concerned – and that is all that mattered – there was no relationship.
Dan's misplaced assumption that his advisory role would continue after Phil's passing holds several important lessons for male advisors:
- Dan's dollar-centric framework for evaluating his performance was misaligned with Marcie's values and financial priorities.
- From Dan's perspective, he did his job well. For most of the past 17 years, Phil and Marcie's portfolio value grew. More recently, it had sustained losses, but so did everything else. Dan's view was that a $316,000 decline in a $2,450,000 portfolio was reasonable considering overall market performance.
- In their annual meetings, Dan's attention was focused on Phil. Dan perceived Phil as more knowledgeable about money than Marcie. Phil liked reviewing the statements, charts, and graphs that he was shown. Dan perceived Marcie's staying in the background, her silence and nodding, as agreement.
- Dan appreciated Phil's interest in stock picking. They loved to discuss various companies. Most often, Dan would agree with Phil's suggestions to buy or sell certain stocks. Dan felt that Phill completely understood the risks involved.
Several weeks after Phil's funeral service, Marcie decided to look for a new financial advisor. This was not a new thought. For years, she has been uncomfortable with Dan's focusing his attention on Phil. Although she was included in many meetings with Dan, Marcie never felt that she was a participant in any meaningful way. Dan seldom made any sustained eye contact with her and rarely asked her questions.
On more than one occasion, Marcie asked Phil why he liked Dan. Phil's responses were consistent: “He's doing a good job. Our investments are growing." But Marcie would wonder if the growth was truly due to Dan or because everything seemed to be growing. She wondered if there was too much risk in their investment portfolio.
When the portfolio losses came, Marcie 's concerns intensified. At age 64, in good health, and mindful that her mother lived into 92, financial security over the long term is what Marcie thought about most. The stock picking was of no interest to her.
Reducing risk was a keen interest.
Unexpectedly, Phil became seriously ill, and within a few short months he had passed. When she was able to focus on money issues, Marcie could not imagine looking to Dan for financial advice. After all, Dan's relationship was with Phil, not her.
In thinking about how she would find a financial advisor, Marcie asked her girlfriends for recommendations. One friend, Sue, gave Marcie a glowing review of her advisor, Mark.
Marcie called Mark. After a brief conversation, Mark invited Marcie to his office. Within 15 minutes, Marcie knew that she had found the right advisor.
On her drive home, Macie thought back over her conversation with Mark. She understood why she was so comfortable with him:
- In a conversation lasting 45 minutes, they never discussed investments.
- Mark was warm. He smiled and made eye contact.
- He asked questions that held deep meaning for Marcie.
- Mark wanted to know as much as Marcie could teel him about her three children – their goals and circumstances.
- Mark conveyed a sincere desire to understand Marcie's values.
- Mark listened intently as Marcie described her concern for her financial security over what she felt could be decades.
- When Marcie expressed her priorities, including reducing risk and have a secure income, she felt that her concerns registered with Mark.
- For the first time in her life, Marcie felt listened to by a financial advisor.
How would you describe a profession that loses 70% of its customers? Broken? This is the regrettable state of the financial advisory profession in the context of boomer women.
By the end of this decade, women will control almost all the available wealth assets. I ask you to consider these five questions:
- Unless male advisors can develop authentic relationships with women clients, will they have a viable future in this profession?
- Do the majority of male advisors operate under the delusion that they have meaningful relationships with female spouses?
- Does the profession’s track record warrant a concentrated effort at coaching male advisors on how to create authentic relationships with female clients?
- Do male advisors tend to serve-up too much risk to "boomer" women? Do male advisors fail to appreciate how differently men and women look at money?
- Doesn't it make sense that greater recognition of women's longer life expectancies argues that more advisors should embrace in their planning the guaranteed lifetime income that only annuities can deliver?
Marcie's new advisor is male. From all the research I've read, women are happy to work with a male advisor, as long as an authentic relationship exists. The key question is, "Will men be able to change in ways that lead to constructive relationships with women?"
If not, we are going to need many, many more female advisors.
Wealth2k® founder David Macchia is an entrepreneur, author, marketing strategy expert and public speaker whose work involves improving the processes used in retirement income planning. David is the developer of the widely used The Income for Life Model®, and the recently introduced Women And Income®. David has authored many articles on the subjects of retirement income planning, macroeconomics, and financial communications. He is the author of two books, Constrained Investor®, and Lucky Retiree: How to Create and Keep Your Retirement Income with The Income for Life Model®.
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