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Nan DasGupta of Boston Consulting Group. (BCG/BCG)
Nan DasGupta of Boston Consulting Group. (BCG/BCG)

Wealth Management - Advising

The differing female view of financial services Add to ...

What do women want?

It’s an increasingly important question for wealth managers and financial institutions as the number of high-net-worth women climbs.

In North America, women now make up 37 per cent of individuals with greater than $1-million in investable assets, according to the 2011 World Wealth Report by Merrill Lynch Wealth Management and CapGemini Group. Globally, the amount of wealth controlled by women is expected to grow at a rate of 8 per cent a year through 2014, says a July, 2010 report by the Boston Consulting Group – entitled Leveling the Playing Field – that looks at gender and wealth.

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The BCG report examines the demographic drivers of the growth in female-controlled wealth: the growing number of better-educated women in the workforce, the decline in the income gap between men and women, and the increase in women inheriting wealth.

BCG also surveyed 500 women worldwide, all of whom had at least $250,000 in bankable assets, and found the majority weren’t satisfied with the approach their financial advisers were taking.

The study’s conclusion: As wealth-management clients, “women are both significant and undervalued.”

“In general, the industry has been wired in a way that’s misfiring,” says Nan DasGupta, a Toronto-based partner and managing director for BCG.

“When you take a step back and you talk to many, many women, you do see some very common themes,” she says. “And those themes are around the nature of the conversation with their investment adviser. And [women]are feeling very, very underserved and unsatisfied by that conversation.”

Among the findings of the BCG report: 55 per cent of those survey believed their wealth managers could do a better job in how they serve women, with 24 per cent saying advisers need to significantly improve.

What these women say they want is more contact and explanation from their advisers; a tailored, goal-oriented approach without sweeping, sometimes condescending assumptions, such as:All women are risk-averse.

“Women get turned off when the conversation drives immediately to performance and numbers and allocation,” Ms. DasGupta says. “They actually believe that it’s important to start with the goal conversation – what am I trying to achieve? – and then work your way into the conversation about the specific asset allocations and the specific return and risk expectations.”

Women do want more information, says Sandra Henderson, vice-president and managing director of BMO Harris Private Banking, which deals with the high-net-worth segment of banking – $1-million-plus in investable assets.

Women will ask for all the data and want to know all the risk, Ms. Henderson says. “They don’t tend to make decisions quickly.”

Then, she says, “they will outline their lifetime goals and want to make sure that their assets match those goals – while a lot of men don’t look at things with the same long-term perspective.”

Charyl Galpin, co-head of the private client division at Nesbitt Burns, agrees. “[Women]want more information to understand the decisions that are being made – and in many cases are quite happy to rely on the advice of an adviser, but they’re going to ask a lot more questions before they make decisions.”

Tuula Jalasjaa, managing director and head of private client investments at the Scotia Private Client Group, says that taking a long-term view of financial matters makes sense for women because “the reality is, they do have a longer life cycle.” Women live longer and often have interrupted work lives, with marriages and breaks while having and raising children.

“Women tend to want that more holistic approach – advisers or someone who can talk to them about wills, trusts, estate planning, insurance. They’re looking at goals in a much broader sense in terms of meeting their overall needs and their family needs.”

Ms. Galpin, Ms. Henderson and Ms. Jalasjaa all say their firms have worked with advisers to change how they work with women. That includes having continuing conversations with clients about risk tolerance, goals and how best to meet them.

“I think the time now is spent a lot more about understanding individuals and their families, and how they all connect, whereas before it was all about the numbers,” Ms. Henderson says.

“Nowadays it’s never about the numbers – it’s about what do the numbers mean in terms of the long-term plan, in terms of what they are trying to accomplish.”

Ms. Galpin says that more and more, advisers are recognizing that when working with couples involving men and women, they have to make sure they speak to both partners in relationships. “A lot of the decision-making or discussion might be happening behind the scenes, with the female partner in that client relationship.”

What women don’t necessarily want is a woman sitting across the table. They don’t have a preference if an adviser is male or female, Ms. DasGupta says; they just want advisers “who get it.”

Ms. Henderson says that at BMO Harris Private Banking, the internal conversation is about getting advisers to stay. Female clients, she says, “like to deal with the same person and not to tell their story over and over again.”

The solution, she says, is to build a team of individuals for each client so there is continuity.

“It’s been very important to look at it differently than we used to,” she says.

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