It has been 100 years since British women were first given the vote.
The past few years especially has seen a lot of drive towards women's empowerment, gender equality and equal pay across a number of different industries previously dominated by men.
The landscape within the wealth industry is ever changing. Powerful demographic, economic and technological changes are helping increase women’s financial strength and independence.
Boston Consulting Group estimates that by 2020 women in America will be responsible for $72trn, which represents 32 per cent of the total wealth.
With the growing rate of women’s participation in the labour market, which has risen from 34 per cent in 1950 to 57 per cent in 2016, the wealth and income gap is gradually narrowing.
It is becoming more and more conventional for women to inherit wealth, which used to be mainly passed down to male successors as part of cultural traditions.
In addition more women are pursuing higher education, climbing the career ladder and choosing to have families later.
Women do think about investing differently and hence change within the industry is needed in order to increase female participation in the world of investing.Even such factors as falling birth rates are in fact contributing to the growing wealth of women.
Unfortunately, it is not all blue skies and butterflies.
According to a report by the Chartered Insurance Institute, in the UK 52 per cent of women in their late 20s say they do not understand enough to make decisions about retirement savings, even though women continue outliving men and retiring earlier.
The same report states that only 37 per cent of women aged 18 to 24 feel very confident managing their money.
When it comes to the wealth management industry, according to a survey conducted by EY, women do not have a positive attitude towards it.
Often, words such as ‘complicated’, ‘unwelcoming’, ‘patronising’, ‘full of jargon’, ‘untrustworthy’, ‘male-dominated’ are being used to describe their view of the industry.
Some 73 per cent of female clients feel their private banker misunderstands them and cannot empathise. And 62 per cent of women are willing to consider switching to another wealth manager.
The question is, how can the industry improve and what changes need to take place in order to satisfy female clients?
Are they any different from male clients?
The short answer is yes, women do think about investing differently and hence change within the industry is needed in order to increase female participation in the world of investing.
First and foremost: transparency and education.
Transparency is a key priority for wealthy women and especially important in evaluating investment performance and fees. Women tend to feel less competent when it comes to financial matters.
However, they are open to admitting their lack of expertise and are open to learning.
In my experience, I have noticed that women prefer to understand their options fully before making any decisions, which might mean they take much longer to implement and action their investments than their male counterparts.
Therefore, combining an educational approach with clarity of investment views and transparency on performance and fees is an absolute necessity.
The second aspect is around goals and priorities. Female investors’ goals and priorities tend to differ significantly from those of male investors.
Women place much more importance on personal and family goals. They tend to prefer a more risk averse and long-term approach that takes into account their priorities.
Finally, communication is another key aspect. There is a clear need for change in how and what information is presented to female clients.
The information flow needs to be more in line with their expectations.
EY’s global wealth management research report shows that clients are keen to shape and share content they receive and they still would like to retain access to human contact.
Indre Butkeviciute is founder of Lily Advisory
