David R. Evanson
The Career Advisor, Fall, 2004
The median sales price of a financial planning practice doesnzzt vary much by the sex of the owner, according to David Grau of FP Transitions, which assists buyers and sellers: $427,500 for women versus $423,000 for men.
But get this: the average woman-run practice on the market has 180 clients versus 260 clients on average for male-run firms.
Pull your bottom jaw off the floor.
Itzzs not shocking that women may have edged out men by a small margin in a comparison of absolute values. It is shocking however that they have done this with a client base that is just two-thirds the size. Said differently, when using client counts as a measure of value, men have to maintain client bases equivalent to 150% of womenzzs just to stay even. Said differently once again, women are mopping up.
A tenable inference to draw from these statistics is that women are more successful at deriving value from client relationships than men. Why is this so, and what can other planners learn from it?
According to Ms. Shawn Dreffein, president and chief executive officer of National Planning Holdings, Inc., among the nationzzs largest independent broker-dealer networks, one of the critical differences is not what women say, but what they hear.
“Women appear to listen more than their male counterparts,” she says. “The early part of a client relationship is one of the most important, and because women listen more, they may be able to take in more details that matter later on in the client relationship.”
Jackie Figliola, head of operations and product for ING Advisors Network, a broker- dealer networks with more than 10,000 professionals, concurs. “I think that of the many stereotypical traits that people refer to – many of which would benefit any financial advisor, male or female — the ability to listen, and listen well would have to be on the list.”
Figliola says another stereotypical female trait that, where present, makes a difference is empathy. “A good planner will incorporate the emotional attributes of what an individual is going through into the actions that are taken,” she says.
Also add intuition, says Figliola. This trait is much harder to define. What is commonly called “womenzzs intuition” has vexed the great minds of civilization for ages. But intuition may be linked to more effective interpretation of verbal and non-verbal clues. The net result of this intuition, says Figliola, is that it enables women – and men if they have it – to lead them down a path that uncovers a clientzzs true feelings, and true goals.
Finally, Figliola suggests that a trait often attributed to women that can have a material impact on the success of a financial planning relationship is a team approach. Whereas many planners have an autocratic relationship, in which the expertise flows just one way, “the approach of making the client and the financial planner a team may be prized more by the client,” says Figliola.
As if to confirm the notion that women create value by building stronger relationships with fewer clients, FP Transitionzzs Grau says that fewer than 1% of the buyers of financial planning practices are women. He speculates that the stronger relationships they build generate more referral business resulting in less need to buy clients. He also suspects that “the prospect of adding 200 clients at once may be viewed as something that would undermine their existing relationships with clients.”