Women face particular challenges when it comes to navigating the world of financial planning and investing with confidence, whether caused by behaviors more common to them or the way the wealth management industry has historically perceived them. However, with women poised to be on the receiving end of a massive generational wealth transfer in the years to come, advisors need to make sure they are connecting with and supporting their women clients in ways they have not done before. That’s where behavioral finance can help.

Understanding Behavioral Finance

Behavioral finance is a branch of economics that studies how psychology influences financial decision making. It recognizes that our emotions, biases, and cognitive factors motivate people to make choices when it comes to managing their money. This intersection of psychology and financial services also explores concepts such as loss aversion, overconfidence, and herd mentality, all of which can impact a client’s financial outlook.

In an episode of A Woman’s Clarity podcast, Daniel Crosby, Ph. D., Chief Behavioral Officer at Orion Advisor Solutions, told Kirsten Schlumbohm, Vice President of Annuity Sales at C2P, that there are many ways women have been misunderstood by the financial services industry, despite them often outperforming men in investing, and that those should change. “The way our industry has tried to approach women about investing and money, I think a lot of times it’s patronizing, it’s kind of pink-washed … and so we should be speaking to women and meeting them where they’re at, which is in high places.”

Women’s Financial Behaviors

Women face a unique set of challenges in the financial realm. Historical and societal factors have contributed to disparities in confidence and participation. Additionally, research over the years suggests that women may exhibit different behavioral biases compared to men. These biases can include being more risk-averse and seeking more education and information before making decisions.

According to Fidelity’s 2021 Women & Investing Study*:

• 64% of women want to be more active in their finances, which includes making key investment decisions
• 65% of women said they would invest more or have a higher likelihood of investing if they had clearly defined steps of how to
• 70% of women reported they would need to know more about choosing individual stocks.

How Financial Advisors Can Help:

1. Education and Empowerment:

Financial advisors play a crucial role in educating their female clients about financial concepts, investment options, and the importance of long-term planning. By providing comprehensive and tailored financial education, advisors empower women to make informed decisions and take an active role in managing their finances.

2. Identifying Behavioral Biases:

Financial advisors who are skilled at recognizing behavioral biases of their clients can be better fiduciaries. By understanding their women clients’ decisions on a more personal level, advisors can help them feel more confident in their financial plan and investment strategies.

3. Goal Setting and Planning:

By helping women establish goals and using a holistic financial planning process, advisors can create a roadmap for their success. Working with women clients to explain and develop personalized financial plans that consider risk tolerance, time horizons, and income streams, aligning investments with these goals.

4. Behavioral Coaching & Support:

When women clients feel like they have a trusted financial representative, this is reassuring during times of market volatility, helping them stay focused on their long-term wealth objectives. Financial advisors should provide ongoing support for their women clients, guiding them through market fluctuations and create a customized investment portfolio they can feel confident about.

5. Communication and Collaboration:

Effective communication is key to the advisor-client relationship. Financial advisors should take extra time to understand their female clients’ unique circumstances, values, and concerns. Kirsten Schlumbohm added that it’s important for financial advisors to come into meetings with their women clients with open ears and create a safe, inclusive environment. “Women want to be heard, they want to be educated, they want you — the advisor — to come to the table they’ve set, not one that’s been set for them,” Schlumbohm said.

When financial advisors employ aspects of behavioral finance to understand, connect with, and serve their women clients, those clients feel more confident in their overall wealth plan and engaged in the process. By educating, guiding, and listening, financial advisors can better help women build a more secure financial future and feel empowered in doing so.

*Source: https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/about-fidelity/FidelityInvestmentsWomen&InvestingStudy2021.pdf

Financial Professional Use Only

The information provided in this presentation is not intended as investment advice or legal advice. The information provided is for informational and training purposes only. The information in this presentation was accurate as of the time the material was created. Tax laws and rulings can frequently change. Please discuss the client’s current situation with an accountant or tax advisor.

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C2P Enterprises consists of four individual companies that share one vision: improving the lives of American families through holistic financial planning. Prosperity Capital Advisors is an SEC Registered Investment Adviser (RIA) that provides financial planning and holistic wealth management solutions to investment advisors and clients nationwide. Valor Capital Management is an SEC Registered Investment Adviser operating as a portfolio strategist and turnkey asset management program. Clarity Insurance Marketing is a best interest-focused insurance marketing organization that facilitates product screening, selection, and support for all lines of fixed insurance products. Clarity 2 Prosperity is a financial training, coaching, and IP development organization committed to simplifying financial planning for financial advisors while helping them understand best practices for integrating investment and insurance solutions in a single, holistic plan. Collectively, these organizations provide advisors the training, resources, products, and tools to successfully grow their independent advisory firm while serving in the best interest of each of their clients.

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C2P Enterprises
30400 Detroit Road, Suite 201
Westlake, OH 44145

(888) 240-1923

questions@c2penterprises.com

C2P Enterprises consists of four individual companies that share one vision: improving the lives of American families through holistic financial planning. Prosperity Capital Advisors is an SEC Registered Investment Adviser (RIA) that provides financial planning and holistic wealth management solutions to investment advisors and clients nationwide. Valor Capital Management is an SEC Registered Investment Adviser operating as a portfolio strategist and turnkey asset management program. Clarity Insurance Marketing is a best interest-focused insurance marketing organization that facilitates product screening, selection, and support for all lines of fixed insurance products. Clarity 2 Prosperity is a financial training, coaching, and IP development organization committed to simplifying financial planning for financial advisors while helping them understand best practices for integrating investment and insurance solutions in a single, holistic plan. Collectively, these organizations provide advisors the training, resources, products, and tools to successfully grow their independent advisory firm while serving in the best interest of each of their clients.

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Thank you for your interest in C2P! Please fill out the form below to learn more about working with us. A C2P team member will be in touch with you very shortly. You can also contact us directly via phone or email.

C2P Enterprises
30400 Detroit Road, Suite 201
Westlake, OH 44145

(888) 240-1923

questions@c2penterprises.com

C2P Enterprises consists of four individual companies that share one vision: improving the lives of American families through holistic financial planning. Prosperity Capital Advisors is an SEC Registered Investment Adviser (RIA) that provides financial planning and holistic wealth management solutions to investment advisors and clients nationwide. Valor Capital Management is an SEC Registered Investment Adviser operating as a portfolio strategist and turnkey asset management program. Clarity Insurance Marketing is a best interest-focused insurance marketing organization that facilitates product screening, selection, and support for all lines of fixed insurance products. Clarity 2 Prosperity is a financial training, coaching, and IP development organization committed to simplifying financial planning for financial advisors while helping them understand best practices for integrating investment and insurance solutions in a single, holistic plan. Collectively, these organizations provide advisors the training, resources, products, and tools to successfully grow their independent advisory firm while serving in the best interest of each of their clients.