Is finance content ignoring the biggest potential market?
Female empowerment and gender equality are at an all-time high in the wake of movements like #MeToo and #TimesUp; but is the financial industry progressing at the same rate? A study by Kantar suggests the finance industry still has a fair way to go.
Underestimate women at your peril
According to the Winning Over Women study from research and consultancy group Kantar, financial services firms in the United States are missing out on nearly $800 billion in investable assets through failing to foster relationships with women. The study found the industry is failing to recognise the growing number of female business owners or those in senior management positions; thus underestimating the financial assets under the control of women, as well as the increasing numbers of households whose primary income comes from women.
Despite having more control over theirs and their family’s finances, investing is still considered to be a “man’s world.” A combination of the pay gap, lack of engagement and financial education means there is still a significant gap in investable assets among men and women. Women are more risk-averse and less likely to feel in control of their financial future. Women, therefore, consider it even more important to work with financial providers they trust. However, Kantar’s study found financial planners continue to default to tactics geared toward men, rather than women – with only 61% of women saying their financial services provider meets their needs very well.
Confusing confidence with competence
Education and empowerment will play a vital role in the growth of the industry, allowing women to make informed decisions about their financial investments. As Anita Watkins, Global Head of Qualitative at Kantar explains, “Winning over women requires very different approaches throughout their financial lives. Our research shows financial institutions need to build trust and invite women to engage. They need to involve women as customers and not confuse confidence with competence. And most importantly, they need to empower women, not diminish them”
Winning over women requires very different approaches throughout their financial lives.
Figures revealed to the Sydney Morning Herald by automated investment firm Six Park last October revealed accounts held by females more than doubled last year to 40% of total accounts. According to Six Park founder and CEO Pat Garrett, “Fear is one of the main reasons why women don’t invest. “Robo-investing removes that fear because it’s easy and online, which suits busy women who are working or looking after a family.” And most importantly, considering the general lack of focus on women as customers across the industry, Garrett believes, “Women are doing their research and looking for new investment options outside the traditional ‘stick your money in the bank with the worst cash interest rates in history”.
This means more traditional financial services may soon start to lose out if they don’t consider a more open, educated approach to encouraging adoption by their female clientele. Women are no longer depending on a male counterpart to provide for them; or take charge or their finances and future investments. They need to feel independently secure and they are beginning to educate themselves on innovative ways to ensure this.
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