International Women’s History Month: Women in SMAs

It’s well known that we are embarking on a $30 trillion generational wealth transfer that is sure to impact the financial services industry, and wealth and investment industry especially. According to a McKinsey & Company report women will be the largest beneficiaries of the wealth transfer and control most of the wealth in the nation. According to the report, women live five years longer than men, are expected to make more financial household decisions, and 70% of women change advisors within one year of their spouse dying. Lastly, studies have shown that women are better investors then men.

So, do financial advisors need to take this economic power shift seriously? Absolutely.

Making the most of the new opportunity

From the above stats, it’s easy to see why it’s important to understand how to cater to and capitalize on women’s investment objectives and goals and understand how they may differ from men’s. Studies show that women may be more risk-averse when investing and invest less – but also are likely to be more mindful about ethical and impactful investing – including investing with more women-owned or lead funds and SMAs.

Financial advisors looking to stay competitive and leverage this new opportunity should start thinking now about how to meet changing expectations and diversified demands from new clientele.

Luckily, the Zephyr platform can help financial advisors be better equipped to assist their clients who wish to diversify their investments across genders when building investment portfolios.

No detective work needed: Finding top tier women-owned SMAs

It’s no secret that the financial services and investment management industries are dominated by men. In fact, women make up between 25% to 30% of all U.S. financial advisors, despite being the majority of the population at nearly 51% (U.S. Census Bureau).

Against this backdrop, one way to add diversity into an investment portfolio may be to consider adding more women-owned asset management firms and women-managed investment strategies to their list of approved managers to better align investments with client values and objectives, and increase return on investment.

There are more than 2,800 SMA providers within Zephyr’s PSN SMA database. Of those 2,800 firms, 58 of them are majority women-owned (% ownership > 50). Figure 1 displays some investment management firms that are majority owned by women and offer investment strategies that have been awarded as PSN Top Guns*.

In addition to top-level searches for women-owned asset management firms (and checking which offer top performing SMAs), the Zephyr platform also lets you conduct the same filter on women-managed SMAs strategies. Below are some women-managed SMA strategies that have recently been recognized as PSN Top Guns (Figure 2).

Women are on the cusp of controlling the majority of financial assets by 2030, which makes it very important for financial advisors to understand how to best cater to a rising number of potential new clients. To help women (and all clients) achieve their investment objectives, financial advisors should consider separately managed accounts, which can provide enhanced transparency, control and flexibility to better align your clients’ investment objectives to their values and beliefs.

The Zephyr platform allows you to create custom portfolio proposals, demonstrate portfolio performance and run custom reports, to showcase your strengths and help meet the unique needs of clients. Find out more about what Zephyr can do for you to make the most of the great wealth transfer.

PSN Top Guns an important reference for plan sponsors, financial advisors and asset managers, showcasing the best performing separate accounts, managed accounts and managed ETF strategies each quarter.

To learn more about how women's investment styles and objectives differ from men and how financial advisors can capitalize on the changing demographics listen to our recent Adjusted for Risk Podcast : Why is it Important to Close The Gender Gap in Wealth Management?

Tags: SMAs. PSN Top Guns, Manager Screening, Risk Management