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Fund Firms Fall Short on Helping Advisers Reach Women


While a few mutual fund companies are trying to appeal to women investors, the majority of companies fall short when equipping advisers with specific women-related resources, according to a recent report, "Women and Investing: Shifting the Traditional Sales Paradigm," by Corporate Insight.

The New York-based marketing research and consulting firm examined 17 major mutual fund companies, including American Century, OppenheimerFunds and Federated Investments, to assess what type of sales and educational resources were available for advisers on the Internet to help them specifically target women. Corporate Insight also looked at what resources the firms made available directly to women investors.

Only six firms addressed women's financial needs and provided consistent women-based content, said Alan Maginn, senior analyst and author of the report.

As fund companies continue to look for ways to segment the general population of potential investors into smaller more manageable groups, this is a prime target audience, he said.

"With few firms addressing the topic, it is difficult to make sweeping generalizations regarding the industry's reaction to women investors," Maginn said. However, "based on what we have seen, that segment, from a website perspective, is vastly underserved."

With an increase in divorce rates, individuals getting married later on in life and women living longer than their spouses, it is important for advisers to service this market segment, Maginn noted. Most women will handle their finances by themselves at some point in their life, experts say.

Currently, women are a minority of advisers' clients. In fact, only 20% of women work with a financial adviser, according to an annual survey on women and investing by OppenheimerFunds, which surveyed 1,000 men and women via the Internet last year. Those that do said they find it beneficial, and 73% of women said they were more comfortable with investing because they were working with an adviser.

For the past 15 years, Oppenheimer has offered a "women and investing" section on its website. When the program was first started, it was geared toward bridging the financial understanding gap between men and women, explained Ellen Schoenfeld, vice president and director of educational initiatives at Oppenheimer in New York. Today, women are much more knowledgeable about finances and Oppenheimer focuses more on continuing education for women, she said.

Targeting women is a huge opportunity for advisers. The main women age groups currently being targeted are Baby Boomers, widows and Generation X'ers, Schoenfeld said.

Widowed women are an important segment, as they have the most accumulated wealth and have usually inherited some from the passing of their husband, she said. Working with Baby Boomer women is also important as sometimes women do not work as long as men and did not have an opportunity to earn as much income and save for retirement, she said.

Generation X'ers, women between the ages of 25 and 40, have a considerable amount of money saved, and it will be useful for advisers to have a relationship with them to retain them as clients down the road, she said.

Oppenheimer's "women and investing" section of its website is one of the most popular, and advisers find it beneficial, according to Schoenfeld. Advisers can order materials and brochures specifically geared towards women.

Advisers need more educational and sales content that can be used for potential and current female clients, Maginn said. However, it is imperative that they observe gender tact, and refrain from using stereotypes that may offend their audience, Maginn stressed. Companies cannot assume that women are naive when it comes to finances, he said. There are women who might need a complete basic review of finances, but the majority of women understand finances, he said.

A useful tool is female-oriented quizzes that can help an adviser realize a woman's level of financial knowledge, Maginn suggested. Also, quizzes can demonstrate to women the importance of thinking about their financial situation, he said.

The way women purchase investment products and work with a financial adviser is different than men. Women do not want products pushed at them. The process is not necessarily longer than it is with men, but it is more in-depth, and women want to understand products before they buy them, Schoenfeld said. "More firms should take advantage of targeting women as clients, but some are not aware of the opportunity," said Steven Miyao, CEO at kasina.

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