Women’s financial power is rapidly growing as they have greater access to financial independence and begin to take on more active roles in the economy. It is estimated that women control a third of global wealth. The onus of having to catch up to this fact is on the financial services industry. The paucity of good female-centric financial services is especially apparent in the Wealth Management sector. Despite the growing number of female billionaires and ultra-wealthy, women business owners, the industry remains strictly targeted towards men. While this may not appear to be a pressing concern, in fact, it translates to women losing out on a significant amount of money simply because conventional financial strategies are not tailored to meet their distinct needs.
Financial services for women tend to require more nuance and a personal touch. In the era of female business magnates and heiresses, this is something that Wealth Managers should pay special attention to. A woman’s lifestyle, including her personal, financial, and career goals, are distinct from that of a man in a number of ways:
• Women tend to live considerably longer than men
• Women also tend to retire earlier
• Women tend to have multi-phase careers, that is, they tend to have multiple breaks in their careers that reflect personal responsibilities
• Women’s salaries tend to peak early on in their career, as opposed to men
With the number of affluent women only growing world-over, it is the perfect time to address this hitherto neglected demographic of the financial world. There are a number of reasons why focusing on a female clientele might prove to be an especially smart move for you as a Wealth Manager. Let’s consider a few:
1) Women enjoy a more democratic approach to Wealth Management.
Women prefer to crowd-source their financial decisions. They like to open up their ideas to multiple parties including friends, family, and advisors and have them weigh in before finalising on a decision; rather than blindly follow protocol or expert opinion. A related aspect for you to consider when you decide to focus on female clientele, that stems from this approach, is that women are more likely to go with the option that has a better reputation when choosing a wealth manager. They are more likely to go with a wealth manager who comes highly recommended by their personal network.
2) Women take a holistic view of their investments.
That is to say, they define success in wider terms. They require wealth management strategies that go beyond just market competition and business goals. This offers you a wider scope to explore and expand on your existing strategies. And, in doing so, to come up with new, innovative solutions that incorporate a wider financial vision; one that displays a more nuanced, wholesome understanding than traditional, male-centric strategies. Women also tend to be more straightforward about aspects of the financial strategies that they do not understand, and are more willing to ask for help and incorporate relevant advice. This makes them far easier for you as a wealth manager to work with, and also gives you a clearer idea of where you do add value, and where you can add value.
3) The existing gap between women and the Wealth Management Industry is an opportunity in disguise.
Given that the financial services landscape for women has been such a deserted space, women coming into affluence may be first-timers to its complexities. That is to say, since the industry is not tailored towards them, there may be no best practices established to address their specific requirements. A lack of mentors and role models only adds to the issue. Clearly, the scope is immense for wealth managers who are able to provide innovative solutions tailored to address the distinct concerns and responsibilities affecting women’s personal and financial priorities. In a sense, a Wealth Management firm could potentially disrupt the industry by simply creating plans that account for the distinct priorities of female-centric finances, making it a mutually beneficial venture for both parties.
4) Wealth Management for women is more Financial Coach than Financial Advisor.
Studies have shown that women’s investment goals consistently differ from those of men. While male-centric wealth management would prioritise market-performance and business-related goals, women are more likely to channel their financial strategies toward the accomplishment of personal goals. This is not to suggest that they have no interest in the more conventional aspects of wealth management, rather, it simply shows that conventional wealth management strategies falls short of truly addressing the financial concerns of affluent women. By creating balanced, comprehensive wealth management strategies that understand and address their personal concerns with as much significance as their purely financial concerns, this could prove to be an incredible opportunity for wealth managers to step up to the plate and earn some serious loyalty points by focusing their efforts on female clients.