The stereotype that women have fewer assets and are not interested in finances is beginning to fade, and fund companies are increasingly starting to recognize the opportunity to capture this underserved niche.

Given that men and women think differently, financial companies have started applying different marketing techniques specifically geared toward women, catering to their goal-oriented approach to investing, preference for conservative choices and appreciation for hands-on coaching.

"Women absorb information and interpret messages differently than men," said Delia Passi, president and CEO of Hollywood, Fla.-based Medelia Communications, a marketing company that supports companies in their efforts to expand market share among women. "A smart marketer will leverage these differences and create programs that resonate with women's buying preferences and sensitivities."

Typically, women are goal-orientated and invest in specific action-orientated products, whereas men take a more general approach, tend to be overconfident in their investing and usually chase hot tips and trade on a whim.

Women, on the other hand, are receptive to being educated about investing. They take more time to learn about setting financial goals and constructing an investment portfolio, "and they become very involved once a plan is in place," said Kathleen Beichert, a senior vice president with OppenheimerFunds.

Because of this, women's investments tend to have higher returns, even when the market is not doing well, Beichert said.

Women are also usually adviser and brand loyal. They are far more conservative than men and value safety and security in their investments. "Mutual funds fit the bill and allow women to make smart investment choices while meeting their needs for a holistic approach to planning, with the convenience of diversification and management all wrapped nicely in one product," Passi said.

Forty-four percent of women invest in mutual funds, along with 60% in money market funds and 40% in real estate, which topped the list of investment products most frequently invested in by women business owners, according to a survey by OppenheimerFunds among 150 members of the Women Presidents' Organization, a not-for-profit membership organization that consists of female entrepreneurs at the million and multi-million dollar sales levels.

Additionally, women are more likely to invest in CDs and Treasury or state bonds, and least likely to invest in exchange-traded-funds and hedge funds.

Seminars targeted to women are becoming increasingly popular, giving them an opportunity to connect with other women and hear firsthand what works and what doesn't, Passi said. Word-of-mouth marketing is a technique that works particularly well among women, who tend to appreciate other women's opinions on products or services, she said. For fund companies, it allows their brand message to make a greater impact, she added.

For firms reaching out to women Baby Boomers, seminars with a double topic such as healthcare and financial planning can pique interest and give them an incentive to hire a financial planner.

Even when working with a male client, financial advisers should include their wives on transactions and correspondence, Beichert said. Women are three times more likely to be widowed then men, and it is important they are able to handle their finances throughout a far longer retirement, she noted.

Fund companies and advisers can work with women to help them prepare for a long life expectancy and the impact of inflation. They can also help widows who had relied on their husband's retirement savings and health benefits develop a plan that will carry them through retirement, Beichert said. This will be a critical issue in the years ahead. From 2020 to 2030, when older Boomer women will be between the ages of 64 and 74, they are projected to face an income shortfall of at least $400 billion dollars, according to a 2006 collaborative study by the Harvard Generations Policy Program and the Global Generations Policy Institute.

Advertising approaches to women have been fairly consistent throughout the years, with ads appearing in magazines and on the Internet. However, marketers are recognizing that without supporting the brand promise throughout the sales process, a woman customer will walk away disappointed and will most likely begin a negative word-of mouth campaign, Passi said.

Quality of service is a very important aspect to women. It starts at the marketing level, and has to be maintained through the sales process and beyond.

"Actually, this is where the rubber meets the road in converting a woman prospect to a loyal woman client," she said. Women on average take five to seven points of contact before committing to purchasing financial products, compared to only two points of contact for men, she said.

(c) 2006 Money Management Executive and SourceMedia, Inc. All Rights Reserved.

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