Reinventing Wealth Management for Women

THE NEW FACE OF WEALTH MANAGEMENT REINVENTING W E A LT H MANAGEMENT FOR WOMEN 2 | REINVENTING WEALTH MANAGEMENT FOR WOMENIn the Baby Boomer era, financial advice was often doled out on the golf course or in the men’s club, places women were not frequenting. As a result, the female half of the wealth equation was typically marginalized.This can be hard to reconcile in today’s world. In just a few decades, women have become a financial force with impact. Given the increasing number of women who now have careers, head corporations, run their own household, and invest, firms now need to treat women as a key client category.While many wealth management firms acknowledge this fact, few seem to have adequately changed their advisory model to meet women’s needs. Firms and advisors need to create deep value propositions that resonate with women of all types if they want to remain relevant moving forward.And women are a market ripe for attention. According to our research, only about half (52 percent) of females feel confident in their investing ability. And this research looked as well at the key preferences of female investors. In the pages to follow, we will not only detail those, but provide you with the beginnings of a road map to win with women in wealth management over the long term.The current advisory model is not working for women.According to our research, women are more likely to use dedicated advisors than men, but are less likely to say they are satisfied with their advisors or find them trustworthy (63 percent). As a result, only 61 percent of women reported having a good understanding of their investments and holdings. It is not surprising then that only 41 percent of women say they could invest as successfully as a professional wealth advisor.REINVENTING WEALTH MANAGEMENT FORWOMENFor much of the wealth management industry’s history, advisement has been based on the preferences of male investors. REINVENTING WEALTH MANAGEMENT FOR WOMEN | 3 REINVENTING WEALTH MANAGEMENT FOR WOMEN | 3 Source: Accenture researchINVESTMENT STYLE & TRUSTUse a dedicated investor34%28%Use a hybrid model46%54%Trust advisor to make decisions on their behalf63%69%CONFIDENCEHave confidence in own investment decisions52%65%Believe they can invest as well as a professional investment advisor41%54%UNDERSTANDINGAre primarily responsible for the investments in the household65%84%Have a good understanding of investments61%75%COMMUNICATIONAre satisfied with the service from advisor72%78%Talk to advisors quarterly or more about new investing ideas48%63%Talk to advisors quarterly or more about retirement planning35%52%Figure 1: Women vs. Men: Investing Profiles DifferUSAGE, SATISFACTION & SELF-PERCEIVED ABILITIES 4 | REINVENTING WEALTH MANAGEMENT FOR WOMENWhether women realize it or not, at some point in their investment journey they are likely to need advice on asset protection, sandwich generation pressures, and the impact of lower income and career breaks.INVESTING STYLE. Women are more conservative long-term investors than men. Their primary wealth goals revolve around keeping money safe and saving for long-term goals, primarily retirement. Nearly half (48 percent) of women in our research say they want to preserve as much wealth as possible.DECISION MAKING. When given the choice, women would rather use a self-directed investment portal where they have financial advisor access, but autonomy in decision making.FEE STRUCTURE. A majority of female investors (62 percent) prefer a payment structure that allows them to choose the level of service provided, rather than a set structure where the investor pays a percentage of assets under management.WEALTH TRANSFER. As Baby Boomer women outlive their spouses, they are proving more than willing to move assets in different ways than they did when their spouse was driving financial decisions.i Expect them to challenge advice if a strong foundational relationship with their advisor does not already exist. Most make a switch within three years of a spouse’s death.iiCOMMUNICATION. Career-minded women want a new breed of wealth management—transparent, interactive, and with frequent touchpoints. Yet, we found that only 35 percent talk with their advisors quarterly or more about retirement planning or to see if their goals are on track.UNDERSTANDING. Overall, women want advisors who understand their “life pictures” and “financial journeys” rather than just their investments—a key change from the traditional male client.WOMEN’S NEEDS ARE UNIQUEWhile generalizing an entire gender’s needs is tricky territory, it is safe to say that a majority of women show preferences that differ from those we have traditionally seen in male investors. REINVENTING WEALTH MANAGEMENT FOR WOMEN | 5 Women who invest look beyond product performance. Only 42 percent agree with the statement: “I only care about performance, nothing else matters.” They want an advisor who understands their life map and the go