CIC Wealth Management, a Maryland-based RIA, plans to grow by targeting single and divorced women as clients.
This demographic currently represent about 35% of the $300 million firm's client base, but could CIC's plans to increase that percentage significantly be thwarted by the fact it only has one female advisor?
"When a married couple comes into my office, the husband is often trying to show off," said Michael Fein, CIC managing partner, who founded the company with Ryan Wibberley more than a decade ago.
The firm now has 10 advisors, with the first and only woman advisor hired five months ago. Fein said that the recent hire is largely a reflection of the overwhelmingly male dominated financial advisor industry.
In a nutshell, women are attractive clients because they have more realistic goals, while the tendency of men to display their financial knowledge can get in the way of meaningful progress, Fein noted. And while Fein admitted his preference for working with female clients, the preference--he believes--is reciprocal.
"We spoke with women about preferences for doctors and bosses, and on the whole it seems women prefer working with men. Men sometimes make them feel more comfortable, with women often being more emotional, which can be distracting," he said.
While many advisors said they are blind to a clients gender and that they treat all of their clients the same, CIC asserted that its time to acknowledge and address differences in how each group perceives and implements financial advice.
Eilleen O'Connor from Virginia-based McLean Asset Management agreed, saying that on the whole, advisors need to be better at targeting women if they want to stay in the game, with one implication of this being the need to recruit more females as advisors. According to a study released in early 2012, headed by O'Connor, two-thirds of wealth in the United States will be controlled by women by 2030.
"I think what CIC and other advisors are doing in going after specifically single and divorced women is right," she said. "It can be dangerous to generalize about women in the market so you need to get as specific as you can within your niche."
O'Connor said women are often better referral sources and more loyal to their financial advisor. She disagreed, however, with the opinion that women have a gender preference for their advisor.
"Even today, the financial advisor community is overwhelmingly male--female advisors have not traditionally been an option, but that is slowly changing," she said.
According to a 2010 study by CAIM LLC, a New Canaan, Conn.-based investment firm, women are more likely than men to seek financial advice. Eighty-seven percent of women surveyed selected at least one area of financial education they would appreciate, with the most popular topics relating to retirement planning (35%), college funding (26%), debt reduction (18%), and estate planning (18%).
In addition to seeking female clients, CIC is also targeting pro-athletes, which currently represent roughly 3% of its client base. CIC is pursuing former NFL players and current NFL coaches to help groom them for life after football, according to CIC's Andrew Goodman.
"The majority of athletes will play for two to three years tops, they'll need to handle their wealth afterward," he said.
In the long-term, single women as clients may be the more successful and lucrative arena due to supply, Fein said, but whether it's single women or pro-athletes, financial advisors--both male and female--will stay competitive by understanding their niches best.
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