Women are becoming richer and controlling more of the world’s wealth, yet they remain poorly served by wealth managers and private banks.
About 53 per cent of UK millionaires will be female by 2025, according to the Centre for Economics and Business Research, but advisers say many women find the wealth management industry unwelcoming and full of jargon.
“Wealth managers are often not attuned to female clients, whose approach and needs can be very different from men’s,” says Charlotte Ransom, chief executive at Netwealth, an online wealth manager. “Women . . . typically err on the side of caution for their investments, usually due to a more risk-averse mentality and a lack of confidence. This can lead to them being patronised and talked down to by wealth managers, an experience which can prove to be further alienating.”
But this outdated attitude is changing. There has been a gradual but seismic shift of attention toward women and wealth which has been triggered by the wealth management industry taking notice and adapting their services.
“As the amount of wealth controlled by women has increased, we’ve seen a correlation in wealth managers’ efforts to tailor their advisory model to reflect observed differences in women’s approach to money,” says Kerry O’Rourke Perri, a partner in the private clients group at the law firm White & Case.
Ms O’Rourke Perri says that, in addition to wealth seminars focusing on investing and returns, she is increasingly invited to sessions hosted by wealth managers on topics such as talking to your children about money and caring for ageing parents.
“This really reflects the demand for a more holistic approach to wealth management and planning that we tend to see more from women,” says Ms O’Rourke. “An all-female panel that I spoke at last year was aimed at educating a wealth manager’s women clients about how to prepare in advance for major life events — marriage, kids, divorce, retirement, incapacity and death — which is really something that would not have existed 10 to 15 years ago.”
She says she often receives referrals from wealth managers whose female clients are looking for other like-minded professionals who can identify with their investment priorities, communication preferences and decision-making processes. “In my experience, a conversation with a female client can be somewhat different than a conversation with a male client and many women simply feel more comfortable talking to other women about sensitive issues,” she explains.
“The Financial Power of Women”, a report published this year by Fidelity International, found that women often do not feel confident making financial decisions about saving, investing and securing income for the future, because they do not feel they understand financial products well enough. When they do make decisions, it seems women’s default approach is to be cautious.
Emma-Lou Montgomery, associate director for Fidelity International, says: “There is a systemic problem in the investment industry: women simply don’t see investing as an option for them and are not making their money work as hard as possible.”
To help inform clients, Fidelity launched the Women & Money campaign, speaking to hundreds of women about what deters them from investing. Jargon, complexity, lack of time and fear of risk came up frequently, but so did the way investment is communicated by the industry.
“Having identified certain actions women could take to close the gender gap — such as contributing just £35 extra from their salary into their pension each month — we developed personal stories, key facts, tips and videos highlighting the returns available on the stock market”, says Ms Montgomery. “The content we create as wealth managers needs to be digestible and engaging for women, but also speak to an intelligent audience; it can be all too easy to fall into the trap of ‘dumbing down’.”
Another mistake often made by wealth managers is to lump all their female clients into a single group. Simply assessing a client’s needs by gender can lead to issues being overlooked.
“There have been many positive changes, but the financial services industry is still behind the times when it comes to catering to female clients,” says Oliver Gregson, head of UK and Ireland markets at JPMorgan Private Bank. “Too many firms simply assess a client’s needs by their gender and so view them as a ‘niche’ sector. At JPMorgan we are very careful to recognise how women’s planning needs are different from men’s, while not placing them into a singular group.”
Others take a similar approach. Pictet Wealth Management says it has never segregated female clients into a specific market segment and has no intention of doing so. “We believe strongly in matching clients with a banker that best serves their goals and strategy and who will go on to forge exceptional partnerships,” says Dina de Angelo, a director at Pictet.
Rothschild & Co says it tends to think about clients as family groups and build teams around them, aiming to determine their needs and different personalities. Helen Watson, co-chief executive of Rothschild & Co Wealth management, says: “It’s dangerous to make assumptions and treat female investors as a homogenous group. First and foremost, people are individuals and that’s how we treat our clients.”
Recruitment and retention
Another way the wealth management industry is appealing to women is by addressing the lack of gender diversity within its own staff. Many wealth managers have initiatives in place around recruiting female staff into the industry. Fidelity has launched a New Horizons Returners Programme which supports individuals returning to work after an extended career break. It also runs recruitment events aimed at attracting more girls and women into investment management.
According to an annual survey of wealth managers by Savanta and the FT, JPMorgan has launched a global initiative called Women on the Move, which seeks to expand investment into female-run businesses as well as improving women’s financial health and empowering their career growth.
Pictet Wealth Management has several in-house initiatives that focus on searching for, nurturing and retaining talent. This takes the form of formal and informal mentoring, leadership programmes and networks that allow female staff to share ideas, contacts, successes and failures, resources.
“These networks harness and build the undeniable energy, creativity and innovation that women possess,” says Ms de Angelo at Pictet. “The London office of Pictet is an excellent example of staffing — half the investment platform and half of the front office are women.”
However, while it appears that wealth managers and private banks are moving in the right direction in terms of recruiting female employees, the focus needs to be on retaining those staff, say experts.
Anna Sofat, wealth adviser and director at Addidi Wealth, says: “It’s pleasing to see the wealth management industry beginning to recognise and develop female wealth managers and financial advisers as a means of retaining and attracting more female wealth. However, the problem is not attracting female talent — as many female graduates are recruited into the industry as male — the problem is retention.”
She adds that there is little recognition within the industry that a concerted effort is needed to change the culture of wealth to make the industry more diverse. “We need to reduce the pay gap, we need to promote more female talent and we need more flexible working,” says Ms Sofat.
Protecting women’s wealth
A number of financial institutions in Britain have thrown their weight behind an initiative to make the finance industry a better place for women to grow and protect their wealth.
Banks and wealth managers, including Barclays, HSBC and JPMorgan, have pledged support for The WealthiHer Network, which commissioned the UK’s biggest study into the female experience of wealth, called Understanding the Diversity of Women’s Wealth.
The report found that women suffer from “imposter syndrome”, where they feel underqualified for their roles, with 70 per cent saying their confidence in investing was “average” or “below average”. More than a third of women said they felt patronised by their contact with finance, while 28 per cent said they wanted less jargon.
The survey also said that women are far more risk averse when it comes to investing and overwhelmingly believe the role of wealth is to provide for their families and to bring security and comfort. Almost 60 per cent of the 2,542 women surveyed said the role of wealth was to provide for family and to offer security and comfort. For nearly a quarter of women, wealth symbolises freedom and independence.
The network was co-founded by Tamara Gillan, chief executive of marketing agency Cherry London and Lauren Von Stackelberg, diversity change agent, together with 10 large financial institutions.
The report found there is a “need for improvement across the industry to better cater to female clients” with those surveyed calling for investment to become more personalised.
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