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How to advise the next generation of female clients

How to advise the next generation of female clients

Narrowing your target audience to just women may sound an unwise strategy – surely it makes sense to spread your net as wide as possible. But the next generation of women may need a different approach when looking at investing.

Generally, women are more conservative than men in their approach to investing. This bias can result in many women receiving lower investment returns on their savings and pensions with devastating consequences.

Being financially secure should not mean women retaining all of their money in cash where interest rates are incredibly low and have no chance of keeping pace with inflation.

Instead, young women need to gain the knowledge to understand that investing within risk-based solutions over the medium to longer term is definitely the way forwards and is crucial to protecting the real value of their money.

If taking a risk with your medium- to long-term money is going to freak them out, advise them to start with smaller amounts as a test and build their way up.
Women are fast becoming the go-getters in society but in many cases this is with their businesses or careers and maybe not with planning their personal money for their future.

Women tend to outlive men and should invest in a diversified investment portfolio. Younger women should also consider investing more in equity-based investment portfolios and make investing a habit, including having regular reviews to stay on track. Because of the wealth gap for young women now, it is important to keep costs low, although not at the expense of protection or performance.

Advice approach

As well as thinking about the differences in what advice to give young women, advisers should consider the approach they take to giving this advice. At our firm CL4Women we use a softer approach, a more empathetic style, and a ‘like-minded’ focus on personal goals and aspirations.

It is important that the adviser be a fiduciary. A fiduciary is required to put the clients’ interests before their own. This level of care is crucial.

The women I have dealt with have really appreciated and often felt relieved that they have engaged with an adviser to share their personal views and put their plans in place for the future.

Women who have a trusted adviser to work with now will see more empowering benefits and will also set the standard for future generations to come.

Jo Noon, head of CL4Women.

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