For many decades, the wealth management industry was largely focused on men and their money. Women were on the periphery of the overall money management picture. Even today, it’s easy to make the case that the wealth management industry still caters more to men.
In the real world, however, the role women play in household investment decision making has grown dramatically. These changes were highlighted in a recent research report from the Center for Talent Innovation. Entitled “Harnessing the Power of the Purse: Female Investors and Global Opportunities for Growth”, the report showed that women are in the driver’s seat with a significant percentage of investable assets. The following are a few of the report’s key findings.
- Women create, control, and influence more than $20 trillion, or 27% of the world’s total wealth.
- In the U.S. alone, women control $11.2 trillion of investable assets as decision makers, not just influencers. That’s 39% of the total available.
- In the six major markets polled (U.S., U.K., India, China, Singapore and Hong Kong), fully 66% of women said they are the primary decision maker with their household’s investable assets.
Despite the clear and well-documented advances women have made in wealth creation and investing, the wealth management industry doesn’t seem to have gotten the memo yet. Here are more stats from the Center for Talent Innovation report that underscore this fact.
- 53% of the women surveyed said they don’t have financial advisors
- 75% of women respondents under the age of 40 don’t have financial advisors
- 67% of the women who do have advisors reported feeling misunderstood by them
These stats confirm that women remain a largely overlooked, underserved and misunderstood market segment for most financial advisors.
Sallie Krawcheck agrees. That’s the message the chair of Ellevate and former president of Bank of America’s global wealth management division had for attendees of the Morningstar Investment Conference last week.
How can wealth management firms and advisors get more in tune with women clients? Ms. Krawchek offered several suggestions, including talking with them instead of at them (and avoiding industry jargon), focusing on risk more than upside potential, taking a holistic approach to their wealth management needs, and framing discussion around goals (like paying for college or buying a home) rather than just investment performance.
It’s astounding that in today’s ultra-competitive advice market, this lucrative and growing segment is still being under-served. Smart wealth management firms and financial advisors should be prioritizing the business of these clients. If they don’t, they’ll be missing an enormous opportunity.