Should You Tell Clients How Much You Earn?

That’s one of the intimate details this advisor shares to get them to open up, too. Getting to know clients better is no longer optional.

By Eleanor O'Sullivan

At a recent gathering of financial professionals, Cary Carbonaro, CFP, wanted to know how many of the advisors talk to their women clients about menopause.

Laughter erupted from the crowd.

But Carbonaro, who focuses on empowering women clients, was deadly serious.

“So, only 32% do; interesting. Okay. Everybody knows that financial planning for women is divorced women and widowed women. Guess what? There’s a lot more than that. Menopause is a super important chapter in women’s lives that can make or break them. I’ve had clients quit their jobs. I’ve had clients divorce their husbands.

“I have clients fight with their kids who never, never speak with them again, because of what happened during menopause. It is a major life event that is going to be with women for the rest of their lives,’’ Carbonaro said.

She warned the advisors that in order to succeed they had best know their women clients as a whole person, including their major life changes such as menopause.

Carbonaro, senior vice president and director of Women and Wealth with ACM Wealth, was joined by CFP Marla Sofer, CEO and founder of the fintech company, Knomee. Their presentation, “Knowing Me, Knowing You’’ was presented at the recent SHIFT conference held in Orlando, Fla., and organized by Advisor 2X.

Why This Matters To You

Yes, Carbonaro said, women still make only 82 cents for every dollar earned by men. But, she added, more women are graduating from college, the number of women living without a male partner has tripled in 50 years, and so more women are demanding financial independence.

And they have money to spend.

“Women are going to control 75% of discretionary spending by 2028. Why does this matter to you? Well, right now, there are 65.5 million women in the United States between the ages of 20 and 49. An Oliver Wyman study says that in that group, women alone represent a $700 billion revenue opportunity for financial services,’’ Carbonaro said.

With all that potential, Sofer said, the financial services industry is getting it wrong about the reality of women’s financial lives. Thirty percent of women in the United States today have no retirement savings by the age of 55. But 45% of women are the household breadwinner, with male breadwinners now 55%, down from 85% 50 years ago, she said.

Carbonaro added, “The history of female breadwinners is incredible: you cannot believe how far we’ve come in this short amount of let’s say 50 to 60 years. And when the tipping point happens, which I’m assuming it will before 2030, female breadwinners are going to be the majority in the United States.’’

Not Just For Women

Sofer previously worked at Microsoft, JP Morgan and BlackRock, among others.

“All of that experience really exposed me to the fact that our industry is really, really good at pushing products at people but we’re not that good at knowing our customers,’’ she said.

Radical candor, transparency and reciprocity work wonders in getting to know the whole client, Sofer said, but talking to clients about emotions might be out of many advisors’ comfort zone.

“Even if it’s out of your comfort zone, your clients want money to help them feel confident and feel freedom,’’ Sofer said.

Additional Reading: Playing Therapist to Advisory Couples Who Disagree

Carbonaro has a simple rule about bonding with a client: She shares information about her own portfolio, net worth and tax returns. She calls this her “I’ll show you mine if you show me yours’’ approach.

“I have no trust issues; I am on the super-deep level with my clients. Obviously, a lot of people are going to be like, ‘There’s no way I’m ever doing that.’ But I don’t have a problem with it and it has served me my whole career,’’ Carbonaro said.

A Real Differentiator

In an informal survey taken at the event by Sofer, advisors said money primarily means freedom to them, followed by fulfillment, safety, joy, peace, sharing, helping others and stewardship.

Carbonaro and Sofer suggested advisors guide their clients to align their values with their investing, and to acknowledge when money is a source of joy for them, such as spending on a memorable vacation or a meaningful gift.

“When you guide them to align with their values, the more they are going to feel what you’re doing for them is valuable. When you’re not getting into that vulnerable spot of talking about values, you’re subjecting your practice to falling into the trap of generic, undifferentiated advice and you’re not going to that personalization that they’re looking for,’’ Sofer said.

Eleanor O’Sullivan is a writer for Rethinking65.


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