Lara Morgan, founder of Pacific Direct. Hand out image.
Lara Morgan's new -found wealth was difficult to cope with © Handout image

When Lara Morgan sold most of her stake in Pacific Direct, the business she founded, for an approximate £15.5m, she had to decide what to do with her new wealth. 

“I went from starvation to high net worth in one step,” she says. Coming in to wealth as a woman was not a smooth process, says Ms Morgan. She turned to family and friends for advice, and says she quickly lost a substantial sum with a dishonest financial broker. 

In the three weeks after her company featured on the front page of the FT, she received 32 phone calls from wealth managers, an unsubtle approach she found off-putting. 

“Until the moment when my head came above the parapet not one person on that list had touched my life in any shape or form,” she says. Instead, “[wealth managers] should be backing enterprise venture, tracking the best companies and performances, and provide education and services before exit.”

Women are increasingly becoming wealth holders. The Centre for Economics and Business Research estimates that by 2020, 53 per cent of millionaires in the UK will be female. 

Yet they remain a minority among private banking and wealth management clients at major financial institutions. JPMorgan estimates that approximately 25 per cent of its banking clients are female. For Investec, the proportion is about one-third. 

Recognising the problem, a number of the UK’s biggest financial managers have launched WealthiHer, a network that aims to increase the number of women managing their wealth. Founding partners include Julius Baer, Barclays, HSBC, Investec, Close Brothers, Chubb, C5, Brewin Dolphin, Brown Advisory and JPMorgan.

According to Kantar, the media research firm, 32 per cent of women between 18 and 34 have no savings or investments, almost double that of men in the same age group, and are half as likely to take risks to maximise financial returns.

“Women haven’t been as active about managing their wealth, but the banks haven’t been as proactive in segmenting, engaging and driving female wealth,” says Tamara Gillan, co-founder of WealthiHer and chief executive of marketing agency Cherry London. 

A key part of increasing external diversity is increasing internal diversity. Three-quarters of women say their wealth advisers don’t understand them, says Grace Peters, executive director at JPMorgan Private Bank, citing internal research. Women are more focused on tangible targets, such as property or school fees, Ms Peters says, “and tend to invest according to a specific goal rather than a benchmark”. 

This means wealth advisers need to check in periodically to ensure women’s wealth is working towards their agenda, rather than simply generating returns or fitting a certain risk profile. 

According to WealthiHer research, 83 per cent of women want to be wealthy to provide for their family. Ms Peters says: “‘How can we be good stewards of capital through the generations of family?’ tends to feature more highly on the agenda for women when they talk about their goals and priorities.”

To attract female clients, who she says are also interested in investments that have an effect beyond generating value, such as impact investments or socially responsible funds, JPMorgan is looking to launch a women’s leadership index that invests in women-led companies.

Early engagement is essential for attracting female clients, says Emily Cvijan, a business developer at Investec’s private banking arm. Investec tries to approach ambitious women long before they have wealth to manage, sending a handwritten note and champagne congratulating them on their achievements, “to celebrate the kind of women we are looking to help”.

Companies involved with WealthiHer say it is important to encourage women to engage with the sector by putting on the kind of events that are likely to attract them. For instance, Investec has a history of sports sponsorship, says Ms Cvijan, but it recognises that rugby tickets may not be an appealing proposition for many female clients.

She is planning a wine education event, so that when a female executive who might have spent the day as the only woman in an all male boardroom ends up reading a wine list at a dinner in Mayfair, she will have the confidence to order the bottle for the table, rather than deferring to a male colleague. “We are looking for opportunities to build confidence,” she says, with both their personal wealth as well as more practical matters. 

The network is important for the wealth management industry, says Ms Gillan, “not just because they’re women but because they represent a huge number of potential clients and investment growth opportunity”. 

One message the network is keen to communicate is that women investing money have a direct opportunity to push through changes. Ms Morgan says: “When I placed my money I asked the company that I was investing in to confirm that the woman who was managing my money was paid at the same level as her compatriots — because I didn’t think she was.”

She doesn’t know what the company chose to do, but “I made them uncomfortable”. 

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