A recent report produced by the WealthiHer Network has highlighted a number of the industry’s shortcomings when it comes to engaging with female clients.
Rather than continuing to ignore these findings (as our industry has a habit of doing!), I believe the time is ripe for the financial advice and wealth management sectors to re-assess how it approaches and engages with female clients.
While this exercise is likely to involve change at multiple levels – from hiring, to working practices, through to the way that customer relationships are built – I believe the benefits could be huge for the industry and clients alike. Thinking about how to properly engage with female clients will ultimately allow financial advisers and wealth managers to build strong and sustainable relationships with female clients over the long-term – and this can only be a positive at a business level.
What the study shows
Firstly, let’s quickly run through the findings:
WealthiHer’s research was based on a survey of more than 2,500 people conducted by consultancy Kantar, a survey of more than 100 high-net-worth women, as well as one-to-one interviews and focus groups held with financially successful women.
The research suggests that different approaches can be taken with male and female clients. This is because a little under 73% of women believe that men and women have different investment attitudes and styles, while 71% of women perceive men as more willing to take risks.
The women surveyed were looking for more than a transactional relationship with their wealth – and instead wanted to create better opportunities for people and society. This helps to explain why 67.4% felt it was important to make a social impact when investing. In addition, around 59% wanted to use their wealth to provide for their family and achieve security.
A lack of confidence represents another barrier that women need to overcome to engage more actively with the financial services industry. Seven out of 10 women admitted to having average or below average self-esteem, while 36% felt patronised during their interactions with financial professionals. What’s more, 28% would like the industry to use less jargon and 36% highlighted a lack of knowledge or over-complexity as the reason they have not engaged with the financial services sector.
The final hurdle to overcome is the lack of representation of women in the industry: around 45% of women surveyed would like to see more female client-facing staff.
Time for change
So what can the industry do to improve the way it engages with women?
My first suggestion would be to take a step back and think about the bigger picture. Like many things in life, it could well be that financial planning and investment management propositions have historically been designed with men in mind – in the same way that cars and safety belts are built for the average male!
Of course, there are exceptions to many generalisations – and they are just generalisations – but anecdotal evidence does suggest that men tend to identify with numerical returns, targets and the idea of beating benchmarks. Meanwhile, women typically relate to financial goals or milestones and how these fit into their life plan.
It’s also worth taking on board WealthiHer’s findings that female clients have a bias towards impact investing, want jargon-free interactions with financial professionals, a more personalised service and access to networks.
All of these factors should be considered when thinking about how a new offering could be built or an existing service revised to cater for female clients. This would help women to feel more confident about engaging with a financial adviser or wealth manager, or potentially to bite the bullet and invest personally. You may also find that changes made to your proposition strike a chord with other client groups, like millennials.
The final challenge to improve gender diversity in the financial advice and wealth management sectors is likely to take time. Some people may argue that the wheels are already in motion on this subject. However, I believe we could see more women on the front line in finance if the potential career paths available received better publicity. It could also be the case that smaller employers could benefit from opening their minds to the potential value that female candidates can bring to the business and their clients.
There’s also the prominent barrier that many women and men face in financial services after having children, where a full-time role or the requirement to be in the office everyday may prove difficult or expensive when it comes to childcare. This is where more flexible working practices could come to the fore.
Let’s hope that the industry starts to consider the implications of WealthiHer’s findings and the female elephant in the room is no longer ignored.