Women increasingly constitute a higher proportion of a
wealth manager’s client base now than in the past. With that, comes
the issue of whether women’s wealth management needs to differ from
men. Alison Ebbage finds that preconceptions on what women want
needs updating.
Go deeper with GlobalData
Differences do
exist in the way that women think about managing their money
compared to men. Yet the differences are not as pronounced as once
thought.
The products that women invest in are typically geared to
solving specific long-term problems – rather than playing the
market, which is often linked with male investors.
Kate Sayre, a partner at Boston
Consulting, comments: “Generally, women want to solve specific
problems or fulfil needs in relation to specific life events such
as education or retirement; men look first to the product.”
Sayre adds that women are more
intent on understanding the risk-return profiles of a particular
product and that woman are less likely to be distracted by
short-term performance.
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By GlobalDataJanet Tarbet, a senior private
banker for the Entrepreneurs Client Group at Coutts, notes that
women tend to be much more involved in family financial planning
than they used to be and consequently their voice needs to be heard
by advisers.
Given that a third of Coutts’
client base is female, and in the past three to four years some 19%
of new clients are female, this highlights the importance of
addressing women’s wealth management requirements
appropriately.
Investment
attitudes
Oey Bie Lan, a relationship manager
in Singapore at HSBC Private Bank, says: “HNW women tend to focus
on capital preservation and have a moderate investment risk
appetite or tolerance. They are usually satisfied with a reasonable
performance return.”
This is borne out by research from
Barclays, which indicates that women’s approach to risk differs
from men.
This showed that 49% of men are
prepared to take higher risks for higher investment gains, with
just 31% of women saying the same.
The Barclays research added that
just 33% of female investors describe themselves as risk takers,
compared to 49% of male investors.
A key theme to emerge from
interviews with senior private bankers is that although the number
of HNW women is rising, there is no real need to compartmentalise
on gender as the investment profiles of both sexes vary only a
little.
Women’s needs similar to
mens
Arjuna Mahendran, head of
investment strategy for Asia at HSBC Private Bank, says: “There are
a growing number of HNW women, particularly in China, who
accumulated their wealth through their own efforts, as successful
entrepreneurs or professionals.
Their needs are generally not much
different from their male counterparts, though variations exist
depending on how they achieved wealth.”
Charles Hoffman, a partner at HSBC
Private Bank, says: “There is undoubtedly an emotional intelligence
element and a soft skills factor when dealing with any client.
“On the other hand, it could be an
entrepreneur with high levels of knowledge and high-risk tolerance,
or an entrepreneur with low-knowledge levels.”
Focus on trust, not
gender
This underlines how wealth managers
need to treat all their clients as individuals, as gender
differences tend to have subtle impact on the wealth management
requirements’ of men and women.
This is supported by Scorpio
Partnership’s ‘Futurewealth’ research project, which found only
minor differences in the decisions that men and women make.
“It’s about nuance and women expect
firms to try harder – they reward this effort with their loyalty,”
says Cath Tillotson, a partner at the Scorpio Partnership.
Tillotson advises that wealth
managers should look to their female customers as a benchmark for
their overall service delivery.
Clear communication
impresses
Clear communication and a lack of
financial jargon are other ways in which wealth managers can
impress women.
Barbara-Ann King, head of the
female client group at Barclays Wealth, says that a woman is more
likely to ask for clarification or further explanation.
“The financial industry has more
jargon than most and if you have a client that understands what is
being discussed, then ultimately the client-advisor relationship
will be richer and the wealth manager will retain that person
long-term,” says King.
Being able to empower HNW clients –
whether it is men or women – to make fully informed decisions is
obviously fundamental in private banking and wealth management.
This requires many different touch
points, in addition to relationship managers who understand the
busy and demanding lifestyles of their clients.
Personalising wealth
management products
King says: “The amount of touch
points is important. Being able to access things like online guides
at all hours is important – our clients are often busy. The social
dynamics are changing and women realise that knowledge is power,
especially if wealth is self made, but do not always have much time
to devote to managing their affairs.”
In an age of rising competition,
when wealth managers and banks increasingly recognise that ‘one
size does not fit all’, the importance of personalising wealth
management products is more important than ever.
Minor differences do exist in the investment attitudes of men
and women. Banks need to expect female clients’ knowledge as the
rule, rather than the exception.
