Although women controlled approximately 27%, or $20.2 trillion, of the world’s wealth last year, over half of women feel wealth managers could be better meeting their financial needs, according to a Boston Consulting Group global study released Thursday.
Instead of being talked down to and patronized, women are looking for a partner to help educate them and give them the tools they need to make empowered decisions.
These findings were released in a White Paper, which revealed that almost a quarter of the 500 women surveyed early this year think wealth managers could significantly improve how they serve women. In addition over 70 interviews were conducted with private-banking specialists and wealthy women around the world. Not only do high-net-worth women report feeling dissatisfied with their wealth managers, but they feel the playing field is uneven and they feel stereotyped rather than understood.
“Clients are results-oriented whether men or women,” said Maris Ogg, president and founding principal of Tower Bridge Advisors in West Conshohocken, Pa., in a phone interview on Thursday. “The key is just paying attention.”
After tumbling during the financial crisis of 2008, the amount of women-controlled wealth jumped by 16% in 2009, to $20.2 trillion, the paper reported. Women in North America controlled 33% of the wealth in 2009, women in Australia and New Zealand controlled 31%, women in Asia, excluding Japan, controlled 29%, in Western Europe women controlled 26%, in Russia 21%, and Eastern Europe, excluding Russia, 19%, women in Latin America controlled 18%, women in Japan controlled 14%, and women in Africa 11%.
Boston Consulting Group expects that the amount of wealth controlled by women will grow at an average annual rate of 8% from year-end 2009 through 2014, slightly above the 7% rate from year-end 2004 through 2009. Emerging markets are expected to lead the growth over the next several years.
Yet, 55% of those surveyed said that their wealth managers could do a better job meeting their advisory needs and 24% said that private banks could significantly improve how they serve women.
“We are really on the heels of an age where the woman was the mom and the wife and she was putting the food on the table. Yet over the past 30-35 years that trend has changed,” said Deana Arnett, CFP and senior planning consultant at Financial Planning Services in Manassas, Va., in a phone interview on Thursday. “We are no longer just in charge of the grocery bill. We are in charge of our 401(k) plans. In an industry that is so male-dominated for a male advisor to be successful and connect well with female clients, he has to realize that how a woman relates to her money is going to be different than how a man relates.”
Yet still women feel that men get more attention, better advice, and at times even better terms and deals, said Peter Damisch, a BCG partner and a coauthor of the study, in a press release.
“We heard this sense of subordination time and again in our interviews.”
The problem: Many women report that their relationship managers assume that they have a low risk tolerance and therefore only give them a narrow range of investment options. Many feel the offerings were “dumbed down” and several said that their advisors do not take them seriously.
“Women are earning more and the majority of women outlive their spouses and end up controlling the family wealth at some point in their lives,” said Dune Thorne, managing director at Silver Bridge Advisors, in a phone interview on Thursday. “Yet so many wealth advisors are not developing the right approach to help empower them to be a part of the wealth management process. The women we work with are so well educated and they don’t want to be talked down to. They don’t want concepts and strategies dumbed down. They want really good, smart, thoughtful advice, but they want it to communicated in a way that is not demeaning and that is really partnering with them and helping them to understand and be part of the decision making process.”
The solution is for wealth managers to understand the differences between the needs of men and women clients and their relational styles. Women are often looking to fulfill long-term goals and want to receive personalized advice from their banking relationships. Showing empathy and building trust are critical.