Around the world, women’s wealth and income are growing faster than ever. Powerful demographic, economic and technological changes are increasing women’s financial strength and independence.
This power, and the relative complexity of their financial lives, means that women represent a huge opportunity for the wealth management industry. Yet most wealth managers view gender segmentation as being of minor importance. It is hardly surprising that many female investors feel unwelcomed and even alienated by the investment industry.
In this report on women and wealth, we aim to help wealth managers bridge this gulf.
Demystifying women’s client experiences
Wealth management firms around the world are tilting their strategic spending plans toward revenue growth. This typically involves a focus on improving client experiences — an area where non-financial firms are increasingly seen as setting the benchmark. But as they develop their client agendas, are wealth managers placing enough emphasis on the needs of women?
The growing economic power of women means they are being actively targeted by start-ups such as Ellevest, a digital investment platform led by Wall Street veteran Sallie Krawcheck. However, our research shows that most wealth managers see gender as the least important source of client differentiation. Just 5% of firms view gender as a key driver of segmentation, far fewer even than “other” factors.
To avoid ceding ground to new entrants, established wealth managers need to fully understand women’s preferences. In our survey, we found a number of important differences between female and male wealth management clients. The most important include:
- Performance: Unlike men, women view achieving their personal goals as more important than investment performance. Women are more likely than men to switch between wealth management providers, and do so for different reasons.
- Experience: Women have distinctive preferences in many areas of client experience. These include more emphasis on security, accuracy and privacy; greater appreciation of high-quality human interactions; more openness toward digital technology; and a greater willingness to share their experiences online.
- Trust: Women see transparency and clarity as particularly important drivers of trust. They also place more value than men on advocacy or referrals from family and friends.
Firms do not have to give female clients a totally different experience from that of male investors. But we believe that most should build a greater awareness of women’s needs into the investments and changes they are already making to enhance client experiences. We suggest the following seven specific areas of focus:
- Developing a deep understanding of female investors’ goals and priorities
- Understanding local and regional variations in culture, religion and lifestyle
- Giving advisors the skills to deliver optimal experiences to female investors
- Striking the right human-machine balance in core advice models for female clients
- Providing female investors with clear, substantive information and advice
- Enabling advisors to act as "financial coaches," including for clients’ families
- Embracing digital communication, while ensuring it complements human interaction
Our research debunks conventional wisdom about women investors. However, it also shows that many wealth managers need to do much more to connect with this vital group. Firms need to prioritize the investments in technology, talent and processes that will allow them to provide female clients with tailored experiences.
Wealth managers must act fast and incorporate these changes into their customer experience improvement programs. Those that do so will gain the greatest share of the tens of billions of dollars in additional revenue that could accrue from providing women with better experiences.