How is wealth management changing for women?

By Sandro Forte
Credit: Getty Images
Sandro Forte, CEO of Forte Financial, takes a look at how wealth management has evolved for women over the years, and where that leaves us now

There is no doubt women are now controlling more of the world’s wealth than ever before, with a clear shift of wealth and asset ownership. In fact, those asset control numbers have increased by more than 10% in the last six years to just over 34%.

Research shows that 70% of millennial women take the lead in financial decisions, which is in stark contrast to both those in the Gen X demographic (50%) and amongst baby-boomers, where women would typically be less likely to take responsibility for financial decisions.  

There does not appear to be any evidence to support the fact women want to receive wealth management and financial advice only from someone of the same gender but they are much more likely to look for somebody they can trust and who is committed to building a long-term working relationship. Therefore, the ability of an adviser to listen, educate and empower is clearly very important, as is a genuine desire to build a trusted relationship over time. 

How do men and women differ when it comes to wealth management?

Interestingly, women will generally have a greater risk tolerance when dealing with a female adviser, possibly because of the additional security which flows from a belief that support will be there during the financial planning journey. There is an obvious point to focus on here; behaviour being influenced by relationships.

With global life expectancy rates for women being greater than for men, there is also the matter of a more pronounced shift in wealth transfer and this, by definition, is placing more responsibility on females to manage and control wealth, with women also more driven by outcomes rather than absolute returns. There is also strong evidence to suggest women outperform men (the figure is actually 0.4%) for the simple reason women have a tendency to take a longer-term view. 

We know a greater number of women use a dedicated adviser and yet fewer women than men will trust an adviser to make decisions on their behalf, even though they have less confidence in their own investment decisions. Women will tend to talk less to advisers than men but will show a lower level of satisfaction with service from their adviser. 

As we would expect, 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. They generally prefer to use a self-directed platform where they have access to advice and retain autonomy in decision making. There is certainly a need for transparency, and interactivity with fewer ‘touch-points’ because women want an adviser who understands their life goals and wealth management journey rather than just the product or solution.  

Where does this leave us now?

As a result of the change in attitudes and participation in the wealth management process, many women are now seeing wealth management as a legitimate career opportunity. Their natural tendency to create deep, personalised value propositions resonate with other women but also with men who are starting to understand – and appreciate – the need for a long-term plan. They see the opportunity to improve education and communication empowering others to make decisions and they tend to be naturally more empathetic towards more vulnerable clients as they create comfort by adopting a naturally more cautious approach. 

What was once the professional domain for men is now becoming a real career opportunity for women who not only want to improve their own financial position but also to help others build something of real value over time. Indeed, the increased regulation and professional knowledge requirements are presenting an opportunity, rather than caring as a deterrent, especially for women who may have brought up a family, but now have the time to dedicate to building a business. 

Whether it is entirely a matter of taking greater control of one’s own finances or as a legitimate career choice the wealth management landscape is undoubtedly changing - and companies who ignore this clear demographic shift will likely suffer a reduction in market share and reduced profitably.

Sandro Forte, FCII, FPFS is one of the UK’s most qualified and experienced financial advisers.  He and his company – Forte Financial – have won over 40 awards in the last 30 years and Sandro has lectured all over the world, helping others to achieve greater financial success. His book, Dare To Be Different, is an international best seller.


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