How well do you know your audience? Research shows that while females are commanding ever more wealth and power, women continue to be underserviced by wealth managers. In a two-part series, we explore the growing role of women in global financial leadership and their unique needs and skills as investors and clients.
While the gender gap still exists, it’s narrowing every day. Women have taken great strides in the corporate world and are flourishing in roles that were historically positions filled by men. In Asia, they’re taking the business world by storm with Forbes reporting that Asia’s businesswomen are amongst the richest and most powerful in the world while in the US, a whole generation is taking heed of Sheryl Sandberg’s advice to “lean in.”
Yes, women are hot!
But whereas Aristotle Onassis once said “if women didn’t exist, all the money in the world would have no meaning”, today women don’t exist simply so that rich men can lavish money on them. Instead, they direct the very course of global wealth.
People like Christine Lagarde, Managing Director of the International Monetary Fund and Janet Yellen, new first chairwoman of the Federal Reserve are leading women to the very top of world finance.
It’s a trend that made Huffington Post blogger David Bank the odd man out, gender-wise, at a conference earlier this year. His blog, Women Are Hot… Investments talks about how nearly 100 women gathered to “reshape global financial markets through a gender lens.” He thinks it’s time that men tried to get in on the debate before it’s too late.
Meanwhile, Germany has become the latest country to impose quotas on companies forcing them to increase the number of women in their boardrooms, following Norway, Italy, France, Spain and other nations.
The “Frauenquote,” or women’s quota, as it’s known, will mean that from 2016 onwards firms registered on the German stock exchange will need women to make up at least 30%
of their supervisory boards. Perhaps policy discussions alone will help shift corporate culture, but some people think it’s time for the US to follow suit with gender quotas of its own.
And in a recent Ignites poll, readers said the fund management industry’s most influential women were Martha King, managing director of financial advisor services at Vanguard, Abigail Johnson, president at Fidelity, and Barbara Novick, co-founder and vice chairman at BlackRock.
David Bank concludes that “womens’ empowerment looks to be one of the transformative economic trends of the 21st century,” and we agree.
What does that mean for asset management and fund marketing?
It’s pretty simple:
- Women are controlling a greater share of global wealth.
- Women –quite rightly – expect to be served and valued as individual clients by wealth managers who understand what they want and need.
As a result of working and earning more, women have greater opportunity and power to invest. They are becoming more independent when making financial decisions and in the coming years, it is expected that women will be a larger part of the growing population of HNW clients.
“A record 40% of all households with children under the age of 18 include mothers who are either the sole or primary source of income for the family,” according to a new Pew Research Center analysis of U.S. Census data. “The share was just 11% in 1960” (Breadwinner Moms by Wendy Wang, Kim Parker and Paul Taylor).
Plenty of women think that change has been too long coming, but the reality, now that it has, is that women have time on their side. Females tend to live longer than men, giving them longer to accumulate wealth and a higher chance of someday taking control of their family’s wealth.
A pretty attractive segment for wealth managers to target, right?
Well… You might think so but despite the compelling business opportunity it seems like wealth managers have a way to go in refining their proposition for wealthy women.
In a survey conducted by Boston Consulting Group, “more than half of the respondents said that Wealth Managers could improve their service to women. And more than 70 percent believe that wealth managers should tailor their approach for women.” Many women feel profiled, glanced over, and offered conservative approaches to investing, rather than having their advisor take the time to understand her needs. “More fundamentally, many women feel that the advisory process is geared toward short-term results, and that it discounts the significance of long-term objectives that reflect the impact of the major milestones in a person’s life.”
So, what exactly do women want? Next time we’ll be taking a look at some new research from Merrill Lynch and asking what sets women apart as investors and clients.