Harness the Power of the Purse: Winning Women Investors. Andrea Turner Moffitt
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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 “It was all so terribly out of date,” she says.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Wealth managers, as Arlene’s story illustrates and our research affirms, are wed to an out-of-date conception of who’s got the money and who makes the decisions.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 work to enable them to flourish, or self-actualize; to excel, and be recognized for their mastery; and to earn well, in order to provide for their families as well as their own financial independence and security. But we also find that women are more likely than men to say deriving a sense of meaning and purpose from their work is important to them. Fully 80% of our US sample of women identifies this as important, versus 70% of men surveyed in the US. Women find work particularly meaningful when it helps advance causes important to them. And while women are less likely than men to aspire to positions of power, they’re utterly intent on being empowered and empowering others. They want to be sponsored, but they also want to pull up others behind them and have the influence to promote talent whom they believe to be worthy.
Understanding what women want from their careers and their lives provides a critical context for advisors and wealth managers seeking to understand what women—particularly female wealth creators—want as investors. Just as they seek ways to advance causes important to them through work, women want their wealth to promote “a greater basket of goods.” They’re seeking a financial plan that acknowledges their agency, aligns with their values, and makes possible their vision.
This isn’t to say that women don’t prioritize, as men do, financial performance. Performance is paramount to female investors across the geographies we surveyed, because it affords them the financial security and financial independence they value so highly. The vast majority of women we surveyed (88% of US women, 84% of Chinese women, and 72%, on average, of women in India, Hong Kong, and Singapore) equate wealth with security; large numbers equate wealth with financial independence, too.
Figure 3.2
Wealth means financial security
(Men vs. Women)
Importantly, women also want wealth to bring them latitude in their career choice. More than a third of American women under the age of 40 (creators, inheritors, and spouses) for example, are likely to see wealth in terms of the career choices it opens up for them. Some 38% of the under-40 cohort say this is important, versus 16% of the 40-and-over crowd. Women are more inclined than men to perceive wealth in this way. Female wealth creators in the US, for example, are 79% more likely than male respondents to see wealth as enabling greater career choice. This trend is also particularly pronounced among female creators in the UK (who are 58% more likely than men to see wealth in terms of career options); and women under 40, who are 89% more likely than women who are at least 40 to want money to buy them career latitude.
A greater Basket of Goods
When asked what having wealth means to them, women also cite the importance of being able to fund their aspirations and drive their agenda, which includes advancing causes that are important to them, their families, and their communities. They want both their time and their money to advance important causes, whether that’s investing in their own businesses or acting as an angel investor for companies they believe in, investing in socially responsible corporations or funding microenterprises. They’re donating to charities that fight poverty, or they’re keen to invest in funds that aggregate socially responsible entities. Fully