But bias is the tip of the iceberg. Women do not feel, as our data exemplifies, that the industry truly understands their differentiated value proposition or the way in which they make decisions. Several high-earning women complained of being shown product-centric pitches and detailed, transaction-based spreadsheets, when what they wanted was to see a portfolio reflective of and framed by their broader life goals. Uniformly, they felt sold to rather than listened to, and pushed to make purchases rather than encouraged to articulate goals that might help them align their investment decisions with their values. “I’m sick of having performance data shoved in my face,” a London professional declared. “Don’t give me the sales pitch. Don’t give me information that’s dictated by reporting systems and regulators. Ask me the right questions—what I do, whether I have kids, what are my goals—and then come back to me with solutions you can defend.”
Given the size of the purse, the disconnect women report represents trillions of dollars “left on the table” by wealth management firms. Inheritors’ dissatisfaction is particularly costly: when you consider that half of women over age 65 outlive their husbands by 15 years,28 and that these women are more likely than men to inherit the $41 trillion of wealth transferred in the US over the next 40 years,29 then losing even a small portion of them represents an awful lot of money left on the table.
The Real Cost of Unleveraged Wealth
Yet it’s not merely wealth management firms who pay, in lost revenues, for this failure to connect. Women, too, leave money on the table, not because they necessarily lack an advisor but because they’re prone to underinvest their assets. In the US, for example, women without a financial advisor hold, on average, 20% of their portfolio in cash, whereas women with an advisor hold, on average, only nine percent in cash.30 While keen to engage as decision makers, women often lack the confidence and know-how to fully leverage their own assets, our findings suggest. When those assets fail to grow, women’s ability to transform the world is stunted.
And women are the world’s change agents. According to the International Labor Organization, women represent the single most important poverty-reducing factor in developing economies.31 Consider the stunning impact women have had as microenterprise founders and operators. Microfinance lenders like Grameen Bank and Ashoka have instigated a wave of economic empowerment in the world’s most impoverished corners by empowering their borrowers—a staggering 96% of whom are women in the case of Grameen Bank—with “ownership of assets” and decision-making power of the deployment of those assets.32
As this book will highlight throughout, women want from their wealth an ability to enrich the world—both theirs and the world around them—by seeding new ventures, funding social enterprise, creating charitable foundations, and leveling the playing field for all in terms of access to education, employment, and capital.
So when women leave money on the table—when their assets remain unleveraged—the world, not just women and their families, goes wanting. In the next chapter, we’ll unpack some of the reasons why women and wealth management struggle to join forces.
* pseudonym used at interviewee’s request
Part Two: Understanding the Female Investor
3
What Women Want
As one of few female portfolio managers in the asset management space, Arlene** makes it her business to support women in finance. So when a former colleague in wealth management invited her to attend a launch party she was hosting for her new advisory firm, Arlene agreed to join the guest list of high-net-worth individuals. When she arrived at New York’s Guggenheim museum, she found herself navigating a crowd of older men and their bejeweled wives. Ignored by the hostess, who was intent on her male quarry, Arlene struck up a conversation with a male senior banker she knew, only to be interrupted by an older gentleman who, like the hostess, was intent on building his book of business. Casting a dismissive eye at Arlene, he introduced himself to the senior banker. Her banker friend, amused, leaned in to whisper to her, “Oh, if only he knew how much working wealth you have, Arlene.”
Arlene, who manages a $5 billion portfolio, left shortly thereafter. “It was all so terribly out of date,” she says. “There was not a single person of youth or diversity in evidence, and about ten women to three hundred men. I can’t imagine what my friend thinks she’s doing setting up such a business. I’m certainly not going to give them any of my money.”
The Big Divide
Wealth managers, as Arlene’s story illustrates and our research affirms, are wed to an out-of-date conception of who’s got the money and who makes the decisions. They’re inclined to recognize women as influencers over household assets, as wives who are likely to outlive their husbands, divorcees, and inheritors of family wealth. But as wealth generators or decision makers, women are barely on their radar.
Given the size of the purse, this is a costly assumption to cling to. As we saw in Chapter 1, women don’t just control household expenditures, they allocate family assets. Fully 66% of women we surveyed exercise decision-making control over investable assets, versus 81% of men. And women are increasingly, like Arlene, wealth generators, not just spouses or inheritors. They want to be taken seriously as investors, granted agency in their relationships with advisors, and to have their value recognized.
Some wealth managers targeting female investors, such as Jamie Broderick, CEO of UK wealth management at UBS, well understand that the female market is evolving. “The mistake we don’t want to make is to treat a female industry leader in a certain way because she is a woman; we need to focus on addressing her needs as an investor,” he says. But in other ways wealth managers fail to grasp that the female market is highly nuanced. “There’s no one ‘she-conomy,’” a boutique banker observed in our London focus group. “Women in Southeast Asia want different things from their wealth than women in, say, Europe, and younger women behave very differently from older women.”
Figure 3.1
Decision makers over household assets
(US, UK, India, China, Hong Kong, and Singapore)
Indeed, our survey findings bear this out: geography, generation, wealth level, and source of wealth nuance the female market. Women who create their wealth want different things from it than spouses and inheritors, and their priorities—we uncovered six—vary depending on where they live, how old they are, and how much money they have. Wealth creators make decisions differently from wives and widows, certainly, but also from each other, depending on their age and locale. Confidence and financial literacy levels vary wildly, not just between Asian, European, and American women but also Gen Xers and Boomers, millionaires and aspiring millionaires. Women are widely perceived by the industry as risk-averse investors, but when we segment the female market (as we will see in the next three chapters), we find wide variance in risk tolerance.
Bottom line? Nuances matter in capturing the female market. Just as it would be a mistake to treat female prospects merely as influencers, so too would it be a mistake to treat women as a monolithic market.
What wOMEN wANT FROM wEALTH
In one very important respect, women of all ages and stages the world over are like each other; they want to achieve personal success as well as a greater social good. Research that CTI conducted in 2014 in the US, the UK, and Germany reveals that college-educated working women between the ages of 35-50 want
