March is Women’s History Month, so you’ve likely seen many events, advertisements and sentiments celebrating women over the past couple weeks. Yet despite having an entire month to draw awareness to women’s accomplishments as well as gender inequality and the efforts being made to combat this, quite frankly, history hasn’t been all too kind to female financial services customers. It’s not to say that attention hasn’t been paid to female consumers; Getty Images reported that financial firms are buying 20% more stock photos of women today than they were five years ago, an attempt to reach more women with their advertisements. But historically, financial firms have missed the mark on strategically developing products, services and communications to attract and engage female customers.
In a March 5 panel organized by The FCS in Boston titled Winning Over Women in Financial Services, research firm Kantar shared some valuable insights into the landscape of female spending, women’s roles in financial decisions, and what firms need to know about the opportunities the female demographic represents.
The $800 billion elephant in the room
The first thing Kantar touched on is the female opportunity cost: financial services firms are losing out on $782 billion in potential investable assets from women. While women traditionally invest less than men (according to the investment app Acorns, 57% of women didn’t invest anything in 2017), the opportunity for women to invest, as women control 51% of personal wealth and 80% of consumer spending.
But there are several factors discouraging women from investing and feeling comfortable about it. One of those is cultural: only 27% of women said their high school or college prepared them to manage money, and in the US women are taught from a young age to not discuss money – how much you make, how much you have saved, or what you’re investing in. This lack of conversation, both educational and personal, leads women to naturally avoid the topic of finance altogether.
Another factor is the lack of diversity in financial advertising: financial services companies spent 13 times more to advertise their products and services in male-skewed magazines than in female magazines in 2017 ($240.4 million versus $16.7 million). And even when those communications do reach women, they are still male-focused, featuring older white men and aggressive undertones that don’t pertain to a female audience.
Finally, and likely the most prominent and difficult factor to combat, is the perceived lack of confidence and partnership women report when working with financial planners. One woman interviewed in the Kantar report stated:
“[It’s a negative experience] where they just address my spouse and don’t address me, when it was more than 75 percent my money that was brought into this and I’m the one who’s the investor.”
Other women in the report note being spoken to with condescending tones, as if they don’t understand the matters at hand, while others say their confidence in their investments decreases when the language used is too technical or impersonal. Women seek a level partnership from financial planners, regardless of how confident they are in their financial services decision-making.
How financial firms can close the gap
Financial firms that feel uncomfortable about the lack of attention they’ve paid to female customers have a great opportunity on which to capitalize. Kantar highlighted several suggestions for firms:
Make a good first impression
Retail environments and advertisements are the first places that women gain awareness of and engage with financial firms. Firms’ marketing and advertising teams would benefit from reallocating some of their advertisement budgets towards female publications, such as Better Homes & Gardens, Family Circle, or Cooking Light. Further, firms shouldn’t just use the same ads they use for their traditional male audiences, which “tend to feature older, white men,” and more aggressive language, according to Kantar. Women are much more receptive to advertising that shows diverse groups of people, rather than only one group, even if that one group is solely women. Further, advertisements should appeal to the emotive and relational sides of investing and financial planning, not just short-term results and outcomes.
The other way firms can make a good first impression with women is within their walls at retail locations. Women interviewed by Kantar reported that in-person experiences fall short at firm offices, where “no one looks like them” and fake plants, harsh lighting and intimidating desk setups innately put women on the defensive. Kantar suggests more open office spaces, with side-by-side seating, natural light and real plants to create a more collaborative and less intimidating environment. While these are small changes, women reported they made a huge difference in their engagements with firms.
Get to know women as individuals
Women are seeking relationships with financial providers, so building trust is imperative to firms looking to engage with women. Firms need to conduct more research on women and their spending and investment habits, so they can learn how to help them at different stages in their financial lives. Building empathy and showing women that you understand them on an individual level is how firms can build trust and create more long-term relationships. Further, women aren’t seeking “pink-washed” communications. Being able to create experiences that are inclusive, diverse, and not just built for women can go a long way in building authenticity and trust among female customers. Understanding women as individuals, as well as learning more about different age groups and demographical backgrounds can help paint a picture of inclusivity versus ostracizing the female group as a whole.
Listen and adjust
Engaging with female customers must go past marketing and advertising. Firms need to take time to truly connect with women and learn from brands that have been successful in relating to and engaging with women. This will ensure the messaging and experiences female customers receive match their needs. But firms must also walk the walk and ensure that every touchpoint, from advertising and retail experiences to ongoing engagements by empowering women to take control of their finances without diminishing their confidence in doing so.
There is an immense, nearly trillion-dollar opportunity for financial firms to better engage with and serve the female investor population. Firms must learn to understand the differences between marketing to and working with female versus male customers and ensure this understanding in every engagement. Those that don’t are at risk of leaving billions on the table for other firms to claim as their own.