Male bonding is all too familiar, particularly in the male-dominated investment business. But now a few mutual fund companies are going out on a limb with a little "female bonding" to reach a target market all too often misunderstood: Women.
JP Morgan/American Century Retirement Plan Services of Kansas City, Mo., administrator to 279 401(k) plans with a collective $35.7 billion in assets, will, for the first time this week, debut a women's investment workshop strictly to bond with and educate women plan participants. The company is particularly interested in women Baby Boomers who will be retiring within the next 10 years.
M&T Asset Management of Buffalo, N.Y., a unit of M&T Bank and advisor to the 18-fund $3.8 billion Vision Group of Funds, has been beefing up workshops and outreach educational programs for women investors. So has woman-owned Kit Cole Investment Advisory Services of San Rafael, Calif, advisor to the lone $4.3 million Kit Cole Strategic Growth Fund.
Purse Strings
Why target women? For one, women have a stronghold on family assets. Industry data shows that women make up about 46% of the labor force, 47% of all investors and are equal partners in the decision-making process in more than half of all households.
Also, women often need more guidance to make up for inherent handicaps including earning an average of 24% less than their male counterparts. Women on average are out of the workforce more than 11 years to care for children and other relatives. In addition, women tend to live several years longer than men, and are likely to be the sole financial decision-maker at some point in their lives.
Always About the Relationship
Why develop a program for women only? "Women think differently and process information differently," said Lisa Cohen, a principal of The Collaborative, a marketing consulting firm in Medfield, Mass. "We are much less transaction-oriented and much more holistic."
For the most part, mutual funds have been clueless as to the very different needs of female investors. Many fund firms have backwardly focused on making the sale then later adding the customer service component for women, she said. "But for women, the relationship has to come first."
Many women-oriented programs that have been created are often perceived by women as being the "light" version, or as being dumbed-down for the female set, neither of which is appealing, Cohen added.
In 1992, OppenheimerFunds of New York pioneered these efforts by creating its now famous and successful Women and Investing program. Other fund companies, including Fidelity Investments, The Vanguard Group, Charles Schwab, Prudential Financial and Delaware Investments, followed suit.
What's the payback to reaching out to this estrogen-rich population? Appreciative women who feel empowered by the helping hand and investment guidance are usually happy to park sizable assets with those fund sponsors, industry executives say.
"We're hoping women will invest in the Vision Funds, but we're not doing a hard sell," said Nancy S. Devine, the marketing administrator at M&T Bank. "We never, ever product-push," she noted. "The women's program is much more of an educational push. But women can start investing with us with as little as $25 per month."
M&T's "Women with Vision" program grew out of an investment presentation one female fund group wholesaler had been doing with local churches and small groups. One year ago, hoping to capitalize on that successful presentation and reach deeper into the underserved community of women, Devine proposed a new initiative to host local investing/money management seminars for women and sponsor a quarterly book club.
Devine admitted that she is still tracking the success of the program in gathering assets. "There isn't a huge return up front, but management has been impressed by the kind of women we are meeting," she said. "We're touching many women's lives and making a difference."
More than 550 women have attended the seminars so far. A bonus is that many of the women are not currently clients of the fund group or the bank, Devine noted. Moreover, the group is now in talks with several women's organizations including The Girl Scouts and is seeking to expand the program outside of M&T's local region.
Men Are From Mars
Devine's grassroots movement began by hosting a focus group of 15 upstate New York women business executives. M&T's goal was to collect useful ideas to help focus the program. The women executives were even willing to share their list of women contacts with the fund advisor, encompassing both professional and less affluent, inner-city women, Devine said.
A series of educational modules was developed for the program, including a discussion of retirement and college planning, long-term healthcare, longevity, inflation and even debt management. The free workshops for women are taught at local colleges. The seminars for between 10 and 50 women are still taught by the group's Buffalo/Rochester area wholesaler, who gets a commission on the business generated, Devine said. But unlike some fund advisors who have set their sights solely on the affluent end of the investor spectrum, Vision Fund is targeting women at all socioeconomic levels, Devine said.
As part of its women's initiative, this past May the Women with Vision program awarded its first annual scholarship of $1,000 each to three worthy "women in transition" who had triumphed over severe life challenges and were returning to school. The scholarships were funded through the Vision Funds, Devine said.
"Providing education to women through investor roundtables has been the backbone of our mutual fund and private client services business," said Kit Cole, founder of the investment advisory firm that bears her name and caters to women investors.
Cole has been hosting a series of public roundtable seminars on the state of the markets and investing for more than a year. Between 20 and 25 women typically attend her roundtables, which are advertised in the local newspaper. "Women want to feel hooked in with their sponsor or adviser. Our investor roundtables allow us to begin or further develop a relationship," Cole said.
Cole is working to brand her investor roundtable concept and hopes to bring the program to New York next year. She wants to eventually expand nationwide, becoming the Dale Carnegie of the investment management business, she said. "Women do not have the remotest idea of how much financial power they have," she said.
On Sept. 19 and Sept. 21, retirement plan administrator JP Morgan/American Century Retirement Plan Services is scheduled to hold its first-ever public women and investing seminars in Kansas City strictly for women 401(k) participants of local employers who are clients of the firm. Up to 100 women are expected to attend each seminar.
The initiative has been years in the making, said Diane Gallagher, the firm's participant communications manager. The idea first cropped up when co-ed participant educational meetings showed that women tended to hang back, asked questions notably different than those of male attendees and felt frustrated that men monopolized the discussions.
Repeatedly, women requested sessions just for them, she said.
One of Gallagher's goals is increasing participation levels among women who need to understand the long-term financial needs they will have. That could benefit American Century with a fresh flow of assets into mutual funds managed by her firm. But it might also be a boon to other fund sponsors if additional contributions are allocated to outside funds, Gallagher admitted.
Looks like the "old boy network" is starting to get it.
