Why FinServ Companies are Still Failing to Attract Female Customers

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Does your asset management firm struggle with a lack of female customers? If so, you’re almost certainly not alone – many financial services companies are failing to attract women and while 17 percent of men have a stocks and shares individual savings account, the figure drops to 10 percent amongst female investors.
New research suggests that a very large part of the problem may be that asset managers aren’t communicating with women effectively. That is, the language and imagery they use in advertising and marketing communications is geared towards only one demographic – older men, who might once have constituted the lion’s share of the asset management sector’s customer base, but who nowadays are more of a niche.
Britain Thinks, a consultancy commissioned by the Financial Times to investigate this issue, says that far too many asset managers’ communications are over-complicated and full of jargon – some confuse women rather than inspiring their confidence, while others are downright alienating or even insulting.
Deborah Mattinson, the Britain Thinks director who conducted the research, told the paper that “women were literally shrieking at the investment and financial services advertisements we showed them”. Women rarely feature in asset managers’ adverts and marketing, she pointed out, and where they did they were unlikely to be women who reflected the reality of the potential customer base. Usually, asset managers came off as being interested only in men with substantial sums to invest, Mattinson said.
How, then, to do better? The Britain Thinks research found that women were more likely to question their own knowledge and experience – and that they therefore wanted help getting to grips with the sort of factors that might influence their financial planning decisions. Crucially, however, they didn’t want to be patronised or talked down to.
Some parts of the wealth management industry have already begun to confront this challenge. For example, the stockbroking firm Killik & Co has launched face-to-face investment education seminars launched specifically at women. The sessions have been oversubscribed. Other firms are focusing their energies online, with video content aimed at women and presented by women.
Advertising is an important part of the mix in that it informs customers’ generic perceptions of the firm. For example, the women in the Britain Thinks research singled out online investment platform Nutmeg as an example of an advertiser that appealed to them. Under the tagline “Investment millionaires don’t look like they used to”, Nutmeg featured pictures of young, entrepreneurial looking women, rather than older men.

Nutmeg and Women
Investment platform Nutmeg’s female friendly advertising.

Another female-friendly marketing strategy appears to be to focus on people’s investment goals, rather than the investment itself. For example, women in the research praised communications featuring what investments might achieve for children. The idea is that women are more likely to think of investment as a means to an end, while men may see investment as an end in itself.
It will also be crucial for asset managers to confront two key issues head on: trust and risk. Women appear to be more likely to regard financial services companies as not trustworthy or reliable; they are also twice as likely as men to feel uncomfortable with the idea of taking a risk in order to achieve a return.
According to research by the Scorpio Partnership women also tend to place a higher proportion of their assets with their primary wealth management firm and are more satisfied with the various aspects of their wealth management relationships.
Wealth Manager performance assessed by gender
On a scale of 0-10, how well is your primary wealth manager performing in each of these areas?

Finally, asset managers are also going to have to think about an even more fundamental issue – their own failure to appoint significant numbers of women to senior positions. Research published last month by the wealth management company Tilney BestInvest found that just 8.5 % of investment funds available to retail investors in the UK are run by women.
The Investment Association increasingly recognises that this is a real problem – it is backing the Diversity Project, a new initiative that aims to ensure the savings and investment industry recruits from a wider pool of people – and that such recruits rise to the most senior positions in their companies. In the meantime, however, there is plenty asset managers can do of their own accord.
Asset managers that fail to confront these issues are at serious risk of losing women customers to businesses that are more forward-thinking. All the more so given the emergence of increasing numbers of fintech firms in the asset management space, many of which are run by entrepreneurs (including female entrepreneurs) who haven’t grown up in the male dominated financial services sector.

david prosser

david prosser