Women are being put off investment planning by poor financial services marketing and disengaged financial advisers resulting in the industry missing out of £133bn of extra cash, research has revealed.
According to research consultancy Kantar’s new Winning over Women study, financial institutions have been overlooking female customers’ needs at every major step of the customer journey, from advertising to the advice relationship.
This has resulted in women feeling less confident about approaching financial advice, investing more into stocks and shares, and contributing more to their pensions.
Kantar's research used a variety of survey methodologies which can be found in the report, including social media analysis of more than 600,000 online conversations, and more than 30,000 interviews with women.
Bart Michels, UK country leader for Kantar, said: “Financial institutions are focusing their efforts on the confident, rather than the competent.
"In failing to develop client experiences rooted in men and women’s fundamentally different perspectives on finance, financial services institutions are missing a very significant business opportunity.”
The research found the reduced level of female engagement, together with women’s lower level of confidence, has depressed saving rates among women, even though data shows by 2020, 53 per cent of the UK's millionaires will be female.
According to the study:
- 65 per cent of women vs 55 per cent of men self-identified as having ‘low confidence’.
- 20 per cent of both men and women self-identified as having ‘medium confidence’.
- 15 per cent of women and 25 per cent of men self-identified as having ‘high confidence’.
As a result of this lack of engagement with women, Kantar's research suggested UK financial institutions are missing a potential £133bn investment opportunity.
The report said: "Were financial institutions more engaging to women, and able to support women in increasing their confidence levels for saving and investing to the next decile, an incremental £133bn would potentially be redirected to savings and investments."
However, this additional money needs to be invested more diversely.
The study found the lack of engagement and confidence shown by women has resulted in much lower amounts of savings, and a heavy bias towards cash.
Kantar's research also revealed behavioural patterns between men and women when it comes to other aspects of personal finance, such as banking transactions, lending and mortgage borrowing.
According to the survey, satisfied female clients are twice as likely as men to recommend their bank based on recent transactions.
The study stated: "Women are more responsible borrowers than men, taking a more conservative approach to the barriers on the journey to homeownership, such as deposit requirements, monthly affordability and extra costs."
During a panel session held by Kantar, in association with sister newspaper the Financial Times today (11 October), Emma Nobbs, head of customer on-boarding and engagement at Aviva, highlighted the irony that fewer women than men have life cover, despite approximately 50 per cent of women in Kantar's research claiming their family is their greatest source of happiness.
David Wheldon, chief marketing officer for RBS, said while financial services generally has not caught up with their female customers, or reflect where women are today, he said RBS was working to deliver against women's financial needs, using relevant content, various channels and using relevant experiences in its propositions and campaigns.
Fellow panellist Katie English, chief marketing officer at Nutmeg, pointed out while the investment platform has a higher proportion of female investors than traditional banks and investment providers, at 65 per cent male, 35 per cent female, this has not been through deliberate targeting of female clients, but rather Nutmeg's focus on "simplicity of product", transparency and communication.
The study also highlighted the yawning disparity in wages between women and men in the UK, which might account for some of the lack of confidence and trust female investors have.
Amy Cashman, managing director at Financial Services & Technology practice, and the study’s lead author, said: "Women’s lower engagement is also a major factor behind their concerns and shortfalls in retirement income.
"Average men’s retirement savings, at £73,000, are three times greater than women’s, which average just £24,900. This makes improved engagement of women in the financial sector a social imperative as well as commercial opportunity.”
Earlier this month trade body the Personal Investment Management and Financial Advice Association (Pimfa), which was formed by the merger of the Wealth Management Association and the Association of Professional Investment Advisers, warned there was too little emphasis on diversity and equality in financial services.
At its Women in Wealth conference, Jules Chappell OBE, partner at Hawthorn Advisers, said: "With an average of only 12 per cent of quotes printed in the business pages of the main UK national papers being attributed to female experts, it remains really important for senior women and journalists to work together, particularly in sectors such as finance and technology."
To read the full research, visit uk.kantar.com
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