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Why asset managers need to put females first

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The new financial force

Wealth and asset managers: if you’re not catering to women with products and marketing tailored to their needs, you’re not only way behind the 8-ball, you’re missing an enormous revenue opportunity.

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Underserving female customers: latest research

Recent studies suggest that women may control as much as half of personal wealth in leading markets, with US women controlling about $14 trillion in assets. Around 53% of UK millionaires will be female by 2025, according to the Centre for Economics and Business Research. Today, women have become what Accenture calls a “financial force with impact”.

Yet research published by global management consultancy Oliver Wyman shows there is still a default toward men’s needs and preferences in the approaches of most financial institutions. As a result, the finance industry is missing out on more than $US700 billion a year in revenue by failing to tailor products for women. And women’s wealth is only going to grow, as they become more educated and confident, outlive their spouses, and inherit money from their parents. 

As a result, the finance industry is missing out on more than $US700 billion a year in revenue by failing to tailor products for women.

How is the finance industry failing women?

  • Traditional wealth planning and retirement planning assume income will increase steadily year after year. (This is more likely to be true for men; women take career breaks for caregiving, they live longer etc.)
  • Stereotypes exist about women investors, including that they’re more risk averse. (The EY Women and Wealth report says there’s little evidence to support common assumptions about women investors, “such as a lower risk appetite or an attachment to ethical investing”.) 
  • Wealth managers don’t invest women’s wealth like they do men’s. (With women tending to hold more of their assets in cash rather than stocks and bonds, wealth and asset managers are missing out on a potential $US25 billion in fees, the Oliver Wyman report says.)
  • Wealth managers often talk down to women who do have a more risk-averse mentality.
  • Female corporate and institutional clients are not serviced equally and effectively (Banks don’t manage relationships well, and are missing out on the opportunity to capture existing revenue controlled by women clients.)

Gender bias in asset and wealth management?

It’s hardly surprising that female investors feel unwelcomed and even alienated by the investment industry, says EY’s Women and wealth report from 2017. Their findings show that few wealth managers view gender segmentation as important.

Women do view investing differently – they value achieving personal goals over investment performance so they switch more; they prioritise things like security, accuracy and privacy as well as high-quality human interactions. They’re better sharers online; they appreciate transparency, as a basis for trust.

Many women demand a more holistic approach to wealth management and planning – including preparing for life events like marriage, children, divorce, retirement, incapacity and death. 

It’s also important to note that while women may have different needs than men, they also differ from each other; they’re individuals, not a homogenous “niche” group.

What products should asset managers be creating for female investors and why?

EY identified 7 areas that wealth managers should focus on, from “Developing a deep understanding of female investors’ goals and priorities” to “Giving advisers the skills to deliver optimal experiences to female investors” and “Providing female investors with clear, substantive information and advice.”

If they want to meet women’s needs, investment and wealth firms need to re-think their technology, their processes and their talent.  A good starting point is to recruit more women into investment management and to offer equal pay and flexible working.

While the industry has a lot of work to do, there are some notable pioneers in the field. At investment firm Ellevest, CEO Sallie Krawcheck works with wealthy women offering products and services based on research into women’s attitudes to money. For instance, Ellevest focuses on goals-based investing rather than investing to beat the market, and their software and risk management are designed with women’s career trajectories in mind.

UBS’s five-year Change the Face of wealth program aims to “better serve women” to eventually provide financial solutions for every stage in clients’ lives, as well as access to specialists and connection opportunities. The program is based on research conducted by UBS that showed the financial industry was failing to give women confidence in making decisions about their wealth. The changes proposed range from training advisers to reviewing the gender policy of suppliers.

Merrill Lynch Wealth Management is in the process of running “Women, Life & Money” events across 10 markets, with speakers discussing the cost of health care, balancing family financial support with retirement goals, investing with impact and leaving a lasting legacy. The company is also doing research on the financial needs of its increasingly diverse client base.

After research revealed that companies with at least three female board members outperformed others in overall return on equity by more than 36%, asset managers State Street Global Advisors launched their Exchange Traded Fund (ETF) SHE in 2016. It invests in companies that employ women in high-level leadership roles, based on the SSGA Gender Diversity Index.

Tips for wealth and asset managers using content to market to women

  1. First and foremost content needs to talk to women’s needs, fine-tuned for regional, cultural and lifestyle differences. Content also needs to differentiate between segments: new career women versus married women and divorced women etc. As an example, Merrill Lynch’s content hub for women broaches topics relevant to a broad range of women investors.
  2. Women tend to value personal goals over investment performance – content should be created in the context of life events and family; and the way websites offer this content needs to be clear. The Women and Wealth program from global active asset manager Janus Henderson teaches advisers best practice for dealing with female clients going through life transitions, e.g., divorce and widowhood. It also has client-facing programs and a Women and Wealth online resource.
  3. Women investors show a greater willingness to share their experiences online. The opportunity for wealth managers is to use customer testimonials and set up forums for conversations around shared experiences.
  4. Connection is important for women when choosing their adviser. Euromoney magazine describes a female-focused campaign by UBS in the UK which published adviser bios online with personal information such as hobbies and values, as well as professional expertise. Clients could browse through advisers to find their match.
  5. Content should be transparent – be open about your performance, where you’ve underperformed and what people should expect. Content should avoid off-putting jargon. Ellevest’s CEO answers frequently-asked questions in her ‘Ask Sallie Krawcheck’ series using short, jargon-free videos shot in her office.

Rather than viewing women as a niche market, wealth and asset managers need to make content and products that speak to this audience the new default or risk losing out on revenue. We can help your brand better position your offering so it resonates with females investors. Get in touch.

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Susan Burchill
When Susan was a youngster she didn't know what she wanted to be, but somehow she fell into advertising; then digital was invented so she worked on websites for a while. From there it was a small leap over to TV producing, scriptwriting, promo writing, and some copywriting.... Then when content marketing became a 'thing', she somehow fell into that. It's worked out ok so far - luckily she's always landed on soft things.