Advisers tailor their services as women grow richer

Women control an increasing amount of the world’s wealth but are not investing at the same rate as men, which is prompting many wealth managers to tailor their services to meet the particular needs of female clients.

About one-third of the world’s private wealth is now held by women, according to research from Boston Consulting Group. But, in the UK, the Centre of Economic and Business Research predicts that 60 per cent of the country’s wealth will be in women’s hands by 2025.

The proportion of ultra wealthy women is also rising globally — reaching 10.9 per cent in 2022, up from 6.5 per cent in 2016, based on the latest research from data group Statista published in February.

“There are significant growth opportunities for wealth managers, particularly as women are still a maturing demographic in relation to financial advice and investing,” says Victoria Ross, a chartered financial planner at Progeny.

This is a legacy of the decades in which finances were deemed principally the male domain, she points out. “It’s easy to forget that it was only 50 years ago that women couldn’t open a bank account without their father or husband’s permission.”

As a result, traditional financial products and the investment-led financial services market have proved less attractive to women, says Ross.

“The industry needs to work harder at understanding gender-based drivers and behaviour in relation to finances, so they can speak to women in a manner that resonates as well as embracing opportunities to educate and empower,” she argues.

Ross believes one way to attract women clients is to seek a more nuanced understanding of their specific goals — which could include care giving responsibilities and a need for longer-term planning.

“It’s important that firms take time to reflect on whether they are communicating and marketing their services in an inclusive manner and avoiding gender-coded language and industry jargon, as well as highlighting relatable ambitions and concerns.

“It is shocking how often I, personally, still receive emails from financial institutions that say ‘Dear Sirs’. Companies need to take the lead and promote wealth management as an inclusive space where women’s voices matter.”

The problem, say industry figures, is that the first experience many women have of financial advice is after a divorce or the death of their partner. It means they are thrust into financial decision-making roles without prior experience.

Bhavi Alagaratnam, senior relationship manager at Fidelity International, says: “We need to engage with women sooner, beginning with financial education at school, at university, at the beginning of their careers and, also, at specific life milestones — when they get married, divorced, have children, retire, and when they are widowed.”

She believes that, by identifying these milestones, wealth managers can empower women to take control of their finances and ensure greater financial independence throughout their lives.

“The rise in women’s economic power over the last two decades has been considerable and yet there are still too many ‘gaps’ when it comes to the finances of men and women,” says Alagaratnam.

“Women continue to be paid less, are more likely to take time off to care for children or elderly relatives, and are less likely to invest their money in growth assets — and so end up with less money in retirement.”

However, wealth managers are changing their attitudes and many are working hard to tailor their services to meet the specific needs and requirements of female clients.

“This might include offering more personalised financial planning, addressing specific concerns — such as longevity and care giving responsibilities — as well as providing education on investing and wealth management,” says Alagaratnam.

Above all, they need to recognise the importance of engaging with female clients, she stresses. This includes proactively involving female clients in discussions, and providing education and resources tailored to their needs that can help them improve their understanding of finance.

Others agree. Emma Wheeler, head of women’s wealth at UBS Global Wealth Management, says women need to build up their financial confidence, so they can feel comfortable taking on more risks to make up for the gaps that persist. “We can support this by providing financial education to build awareness and expertise as well as trusted advice.”

She notes that women are already making the right decisions. Generally, they take a long-term view as investors, and will stick to their investment strategy, trading less often than men and responding less to market lows. “For these reasons, their portfolios often outperform,” says Wheeler. “You could say that women are less emotional than men as investors.”

Swiss bank UBS has been training its advisers to help them understand the differences between men and women in their attitude towards finance. It began by conducting research to understand the barriers for women as investors, and then asked behavioural scientists to help develop ways in which advisers could improve their communication with female clients. UBS launched its training programme in 2018.

One key difference in the way women consider wealth planning, compared with men, is that they often favour a holistic approach — one that considers their broader life goals, values and priorities, rather than fixating solely on investment returns.

Rebecca Gooch, global head of insights for Deloitte Private, a division of the Big Four consultancy group, says: “Women can gravitate towards investments and services that resonate with their values, ensure long-term financial security, present opportunities for income generation, and empower them to make well-informed financial decisions.”

Managers that can accommodate and understand this approach to wealth and investing will then forge an enduring relationship with their female clients — from which both will benefit, she concludes.