Harness the Power of the Purse: Winning Women Investors. Andrea Turner Moffitt
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MBA program. There, my aspirations started to change. I studied social enterprise and earned a master’s degree in international relations. I connected with mentors who broadened my worldview, professors and practitioners who inspired me. One of them was Bruce Usher, CEO of Eco Securities, a pioneer in the burgeoning carbon finance industry; as an adjunct he taught one of Columbia’s most popular courses: Finance & Sustainability. He practiced what he preached: in 2009, after going public, Eco Securities was acquired by JPMorgan Chase. Bruce’s inclusive teaching style and his ability to construct a flourishing career rooted in his values, planted a seed that I, too, could aspire to more than personal security for my family.
By my mid-thirties, I had the career on Wall Street that my 18-year-old self had envisioned. Certainly I had the acumen and the independence. But something was missing. I couldn’t pinpoint it at first. I tried running marathons; I travelled to Tanzania and Cambodia. Gradually, however, I realized what it was: I saw no one around me I wished to emulate. The values of my profession were entirely about performance, status, and the bottom-line. Men and women who might serve as mentors lacked that inspirational quality I saw in Bruce Usher during graduate school. They seemed to have sacrificed a great deal to fit the cultural mold. No one had harnessed, as Usher had, his or her intellectual might and financial power to drive an agenda larger than his/her own remuneration.
A MAD MEN WORLD
Even before I got married, I’d begun looking for a financial advisor, turning to my friends and colleagues for referrals. I didn’t succeed. Women I deeply respected and admired would tell me, “I don’t have an advisor,” or, “I’m not happy with my advisor, so I wouldn’t recommend him.” But once we were married, I was determined we find one. Since my peers had no one to suggest, we turned to my husband’s male colleagues. They gave us several names, and so we started courting them to find our match.
The first advisor we met with sent me right back to my first job interview. Because my husband also worked on Wall Street, this advisor directed all of his questions to him, not once looking at me. He ran through a list of discovery questions about our finances, family structure, and short-term goals, but never asked about our individual or joint aspirations. We moved on, working our way down the list of names, only to find this Mad Men encounter repeated. My husband was as baffled as I was by the 1950s stereotypical approach and salesmanship. No one probed our spending habits in relation to our financial values and goals, let alone offered the solutions that had inspired me in graduate school.
So by the time I sat down to lunch with my female peers in the summer of 2011, my frustration had annealed into something of a mission. As women—as wealth creators and leaders—we had the financial know-how and the will to harness our wealth to drive social change. We needed only to find partners committed to our vision, advisors who could steer us to investment decisions that accomplished it.
That they proved so hard to find suggested both a market failure—and an incredible market opportunity.
THE OPPORTUNITY
The fact that women are the world’s fastest-growing segment of wealth creators and controllers is not lost on the financial services industry. For the past decade, industry players have sought to measure and map this expanding segment of the wealth market. In 2010, Boston Consulting Group affirmed in its Leveling the Playing Field study that the female market was huge and growing—at an impressive rate of 16% in 2009, in the midst of the global recession.1 Similarly Merrill Lynch found in 2011 that the high-net-worth women’s share of the wealth market had risen by more than a tenth between 2008 and 2010.2 Goldman Sachs, focusing on the middle class in emerging markets, demonstrated that women are making more household financial decisions, particularly when it comes to consumer goods.3 A Citi report documented the rapid rise of female financial decision makers: between 2008 and 2010, the percentage of full-time working women who consider themselves “household Chief Financial Officer” grew from 68 to 73.4 A Barclays study considered behaviors of wealthy women in different regions around the globe, stopping short of explaining how geographic and other factors affect the way they approach financial planning.5 In one of the most comprehensive studies of women and wealth, BlackRock affirmed in a 2013 study that women were more likely than men to save and pay off debt, but were also more conservative and less confident investors than men.6
From these multiple studies, a profile of the female wealth market emerged. But it’s a frustratingly monolithic market that’s portrayed. Women vary depending on where they live, how old they are, whether they’re married or not, and whether they’re earning income or in charge of managing it. What wealth managers needed, I realized, was a more nuanced picture, with data that not only quantified women’s untapped wealth but also laid bare their unmet needs and gave voice to their desires in terms of services and products.
And I had an idea where to get it. While pursuing my master’s at Columbia, I had the good fortune to work with Sylvia Ann Hewlett, a Cambridge-educated economist whose think tank, the Center for Talent Innovation, was working on advancing women in the ranks of Fortune 500 companies like the banks I’d worked for. Sylvia had approached me to help her create an index to rate companies on the basis of their diversity in leadership.
I shared with her my observation about women, who in my experience not only wanted to work for companies committed to diversity, but to invest in them as well—to invest in alignment with their values and to amplify their agency. Sylvia immediately got it: the Center had just concluded research that quantified the impact of leveraging diverse talent to drive innovation and capture new markets. To their credit, several corporate partners (Deutsche Bank, Credit Suisse, Goldman Sachs, Morgan Stanley, Standard Chartered, and UBS) also got it, providing the resources needed to fund our project and connect us to many forward-thinking advisors and executives who’d given considerable thought to strategies that might capture the female market worldwide.
In 2013, she and I embarked on our research. With the research team at the Center, we surveyed nearly 6,000 investors with at least $500,000 of investible assets or $100,000 of income in the United States, United Kingdom, India, China, Hong Kong, and Singapore. In May of 2014, the Center published our findings in Harnessing the Power of the Purse: Female Investors and Global Opportunities for Growth, a report that quantifies the market opportunity that women represent. It details how women differ, not only from men but from each other. It makes clear how culture, generation, and sources of wealth (inherited or self-created) impact women’s investment approach. It lays bare what women want from wealth, and how they make decisions regarding its allocation and deployment. It measures women’s confidence, financial savvy, and risk aversion, testing presumptions that women are less financially literate and less risk tolerant—and if so, under what conditions. And it spells out what women want from wealth managers, and what advisors and the industry need to do to win their trust and loyalty.
A WAY FORWARD FOR WOMEN, WEALTH MANAGERS, AND THE INDUSTRY
This book takes our report one step further: it lays out strategies for advisors and institutions to leverage women’s wealth. Our research demonstrates that, in order to harness the power of the purse, change must happen at two levels: in the culture of firms, and in the behaviors of advisors on the frontlines with clients.
You will hear from men and women in the industry who are implementing innovative solutions—advisors and firm leaders who have learned to listen to women and offer differentiated client experiences that align women’s investments with their goals, their aspirations, and their values. You’ll meet industry leaders who are forging the kind of culture where female advisors can thrive and contribute their insights, deepening the pipeline of ideas that culminate in innovation for female investors. You’ll come to see how inclusive leaders and gender-smart advisors build successful businesses by driving market growth in ways that benefit us all, from boosting educational access to building trust with clients, from launching vehicles that invest in diversity to helping clients thrive wherever they live.
With this research, I’ve come to see my own meaning and purpose as a wealth creator: to connect the industry to its most powerful market, and to use the market to realize women’s most cherished goals. On that afternoon in 2011, my women colleagues and I enumerated a vision for the enriched world we wanted to create, a world where we could strike a balance between the bottom-line,