Feminine touch works wonders for women with assets to manage

Affluent single women are turning away from typical, middle-aged male IFAs, preferring someone who can empathise. Faith Glasgow reports

After Janet Thompson inherited a portfolio of shares when her husband died in 1994, she decided she needed expert help. She went to an IFA in Bristol, but after several years of unsatisfactory service in which he invested her money in 10-year insurance bonds then brought in a third-party stockbroker, she had had enough.

She met Ian Head, of Close Wealth Management, on a local beginners' stock market course, and moved her assets to Close several months ago.

"I've had more contact with my Close manager in these few months than I did the whole time I was with the Bristol IFA," she says. "He never rang me to make suggestions, and I always felt I was imposing on him when I phoned him, and I could rarely get through anyway. I don't feel confident buying and selling shares.

"I went on the beginners' course because I felt I needed to learn the basics. But if I had been properly advised from the start, I don't think I would have lost as much money as I have over these past years."

Ms Thompson is among a growing number of "mass affluent" women who have earned or divorced their way to a substantial nest-egg, and like Cherie Blair, are juggling multiple priorities and commitments, so they need expert advice on how to invest.

Donna Bradshaw, of the IFA Fiona Price & Partners, which serves an exclusively female clientele, the issue is one of attitude as much as practical advice or product choice. "When we set up 14 years ago, it was in response to women's comments on how offputting the financial services were to deal with, patronising and full of jargon," Ms Bradshaw says. "It's hardly surprising: the average IFA was a middle-aged man, and they're not renowned for their ability to communicate effectively and make small talk." She finds women not only want to talk about "softer" issues, discussing their money in the context of their broader lifestyle and plans for the future, but also want to understand exactly what they are putting their money into, which may involve asking lots of questions. Martin Smith, of Close Wealth Management, agrees. "Among women who are divorcing and have temporarily had enough of the male population, there's a perception that female IFAs will be more patient and honest with them, have greater empathy with their situation and make more time generally."

The need for women to take control of their finances is a reflection of changing demographics and of increasing female earning power (see box). Combine growing self-sufficiency and rising income levels with women's need for career breaks for children, and the likelihood that they will on average outlive their male partners by several years and, says Ms Bradshaw, it becomes evident women actually have a greater need than men for structured financial planning. But women are not a homogeneous group.

"Independent professional women, generally between 30 and 55, come to us for a full financial healthcheck," Ms Bradshaw says. "Most want greater involvement with their financial affairs, and want to be happier with the decisions they make. For that, they need someone they can talk easily to.

"But we also see women in their forties and fifties who are going through divorce and often gave up work for the kids. Some will have substantial settlements but others will have to go back to work to eke the money out. And women thinking about a career change or break to do something different often come here for help in organising their finances."

Even where couples are making joint investment decisions, there can be marked differences of opinion between the partners. Mr Smith, of Close, says: "Many in the financial services sector often overlook the needs of the woman when they're targeting couples. Yet often the two risk and return profiles differ, with the woman being far more risk-averse. That needs to be reflected in their investment portfolios."

Although Fiona Price has made the women-only market its niche, other financial organisations have cottoned on to the idea that many women like to deal with female advisers. HBOS, which takes in Bank of Scotland and Halifax, has increased the number of women financial advisers.

In the past 10 years, more women have qualified as IFAs. IFA Promotions, which can put people looking for independent advice in touch with local firms, calculates that about a fifth of the IFAs on its books are women. It has set up a database of more that 2,000 female members.

Amanda Davidson, of the IFA Holden Meehan, says that although the firm has not set its stall out specifically for the female market, it does have a higher than average proportion of women clients. "In part I think that's because of the availability of female advisers," she says. "In our London office four of 12 advisers are women. But it's also because we are big on socially responsible investment, and many women are very interested in that.

"Undoubtedly, many women prefer to talk to women advisers because there's a natural empathy there, but we do feel treating women as a separate social class can send the wrong messages."