Meeting the investment needs of women

Women are a critical market segment and companies that cater to their needs could gain a significant revenue boost.

Wendy Saint Ruth, FSO IT advisory director at EY, told FundForum Asia that women were an emerging market in the wealth management industry.

She said they represented a real opportunity for business growth that would result in higher revenue and improvement in companies’ bottom lines.

But she added that it was important for firms to apply a customised approach when dealing with female clients.

Wendy pointed out that around the world women’s wealth and incomes were growing faster than ever, with economic, demographic and technology changes all increasing women’s strength and independence.

“Women also tend to have more complex financial lives, and they represent a huge opportunity for the wealth management industry,” she said.

But despite the opportunities, she said most wealth managers viewed gender segmentation as a lower priority when looking at differentiation for their clients, with only 5% of wealth managers globally segmenting their market in this way.

As a result, many female investors felt unwelcome and even alienated by the wealth management industry, with some viewing it as being full of jargon and too male orientated, she said.

Many female investors also feel misunderstood by wealth managers.

This issue was particularly acute in Asia, with 86% of women in Hong Kong and 80% in Singapore claiming the depth of what they were trying to achieve through their investments was not understood, compared with 67% of women globally.

A differentiated approach

Wendy said there were a number of important differences between male and female clients that the wealth management industry needed to consider.

She said women were more likely to have a greater focus on achieving their personal goals through their investments, at 40% compared with 34% of men.

She added that this split was even greater when male and female millennials were compared.

Women were also more likely to switch and change their wealth providers than men.

In terms of engagement and experience, female clients placed a higher value on security, accuracy and privacy of their personal data.

Wendy said: “As a result of that, if wealth managers can demonstrate they are looking after their clients’ data and security, female clients will then leverage digital technology more than male ones.

“But alongside that they also want high-quality human interaction.”

Finally, she said transparency and clarity of financial information were key drivers of trust for women.

Overall, women liked high quality and frequent contact, prompt responses to queries and they put more emphasis on good reputation.

Wendy said in order to build stronger relationships with female investors, wealth managers needed to be aware of their different preferences and different ways of working when delivering a tailored experience for them.

This approached should include understanding their female investors’ goals and being mindful of variations in culture and lifestyle or religion.

 "Women are an emerging market in wealth management but they are under represented by wealth and asset managers"

She suggested firms should build the right skillset within advisors, such as providing coaching in non-verbal communication, while also striking the right balance between human interactions and machines.

She added that it was also important for firms to provide clear information and advice that was transparent, as well as having a two-way dialogue, with advisors really listening to what their female clients were saying.

Wendy explained that they should see their interaction as being more about helping clients, rather than providing financial advice.

She said: “Women are an emerging market in wealth management but they are under represented by wealth and asset managers.”

She added that there may be significant financial upside for firms that boldly focused on providing differentiated service to this market segment.

The benefits of gender diversity

Wendy said research also found that companies that were more gender diverse had improved innovation, risk management, corporate governance and business performance.

She said across industries, organisations that were rated highly for diversity and inclusion were 45% more likely to improve market share and 70% more likely to succeed in new markets.

They also had 57% better team collaboration and 19% greater retention.

But she said: “Female representation across the wealth management industry is a challenge and the percentages are quite low.

“If we can improve the representation of women in the fund management industry and improve the tailoring of experience that is available for female investors that is going to result in increased revenue and increased business growth.”

She added that building a more personal experience for clients and improving transparency and trust would be good for the whole wealth management industry.

“Those firms that really embrace what we have talked about are ripe to be able to reap the reward of the revenue share that is available, rather than allowing start-ups to come through and pose a threat to the more established firms,” she said.