This widespread sense of insecurity indicates broad opportunities for advisors who can make female clients more confident about their finances.
In particular, opportunities may abound for adding women of color to an advisor’s client base. “Even among the more affluent women in the survey with incomes of $75,000 or greater, women of color are less likely than women overall to work with a professional,” the State Farm Center reports. “Among the more affluent women in this survey, women of color (29% Hispanic, 32% Asian, and 29% African American) appear to be less likely than women overall (43%) to be working with a financial professional for advice on their savings, investment or insurance needs.”
Accordingly, the report concludes by suggesting that advisors increase marketing and outreach to women of color. These women are growing in numbers and affluence, and will continue to do so for years to come. Yet many of these women “falsely perceive” that they can’t afford to hire an advisor.
Increasing promotional efforts may be a viable suggestion, but marketing to women of color must be done with care. “Categorizing ‘women of color’ into a single, homogenous group can be a common, yet costly mistake,” said Mary Quist-Newins, director of the Center and co-author of the report. “Financial advisors attempting to market to women of color must understand that there is a vast array of segments, sub-segments and niche groups in this broad classification of American females.”
The State Farm Center study surveyed 3,000 women across four segments of the population: 750 of the “general population” (72% Caucasian); 750 Hispanic/Latina; 750 African American; and 750 Asian. “Our research revealed some common themes among these segments,” Quist-Newins said. “For example, most women do not feel especially secure in their financial position.” Nevertheless, the study found substantial diversity in financial attitudes and actions across a broad spectrum of issues.
Consequently, Quist-Newins suggests that advisors need to “think small” in their marketing approach to women of color.
“Advisors can start identifying possible niches by reviewing their client base for women of color with whom they have a particularly strong affinity and then invite those individuals to act as centers of influence,” she says. “This can be accomplished through an informational interview (perhaps over breakfast or lunch) on a one-on-one basis, or through a focus group with multiple members of the same niche community. If the financial advisor does not have any niche members in his or her practice, there are virtually thousands of community organizations that serve a wide range of interests, passions, professions, and trades to investigate.”