Tuesday, May 22, 2012
Over the next four decades, women will inherit approximately 70 percent of the nation's intergenerational wealth transfers – or nearly $29 trillion in assets. And the first thing the recipients of those funds are likely to do, Kathleen Burns Kingsbury says, is fire their financial advisor.
In her forthcoming book, "How to Give Financial Advice to Women: Attracting and Retaining High-Net-Worth Female Clients" (McGraw-Hill, September, 2012), Kingsbury – an expert in the psychology of women and wealth – makes the case that the financial services industry has historically done a poor job of serving female investors. And as more and more of the nation's wealth moves into female hands in the coming years, it's a mistake that's going to cost the industry big time.
"It's a startling and eye-opening fact that 70 percent of female widows fire their financial advisors within one year of the death of their spouse," Kingsbury says. "Studies have shown that when it comes to satisfaction with a product or service, women rank the financial services industry at the bottom of nearly three dozen categories."
So, what's behind women's dissatisfaction with financial advisors? According to Kingsbury, it's a combination of history and science: Historically, she says, the financial services industry has been a male-dominated profession whose accepted standards and practices were designed to cater to the male investors who traditionally controlled a family's wealth. Science has shown, however, that women's brains are wired to work and make decisions differently than men. What's more, women also perceive wealth far differently than men.
"Men equate wealth with 'power,' while women view it as 'security' for their family," Kingsbury said. "Financial advisors need to understand what motivates female investors: They don't just want to 'win' in the stock market and do better than the next guy. They want to protect their assets for their family – and they want an advisor who will actively listen to them and help them navigate life's ups and downs."
The founder of KBK Wealth Connection, Kingsbury was voted one of the top 10 executive coaches in 2009 by "Women's Business" magazine. Her previous book, "Creating Wealth from the Inside Out Workbook," is one of the top ranking books in the Financial Planning Workbooks category on Amazon.com. As an expert on financial psychology, Kingsbury has been interviewed by numerous media outlets, including MSNBC's "Today Money," Forbes's "Forbes Woman," Thomson Reuters's "Reuters Wealth," and "Financial Planning Magazine." She has also been a guest on WBNW's "Money Matters Radio," WATD's "McNamara on Money," and WCBM's "Money, Riches & Wealth."
Kingsbury holds a Master's in Psychology and is a faculty member of the Certified Private Wealth Advisor (CPWA) program, an educational course developed by the Investment Management Consultants Association (IMCA) and offered in conjunction with The University of Chicago Booth School of Business. She is also an adjunct lecturer at the McCallum Graduate School of Business at Bentley University, where she teaches "Psychology in Financial Planning."