Canada’s wealth-management industry has a woman problem and the COVID-19 pandemic is making it worse.
The health crisis and the resulting economic fallout are exposing the industry’s obliviousness to women’s financial-planning needs. Not only are wealth managers still underserving their existing female clientele, their interminable incuriosity about the financial challenges women face in their daily lives risks repelling future customers.
COVID-19, which has sparked an unprecedented “she-cession,” is becoming a missed opportunity for banks, insurers, fintechs and other money managers to rethink how they cater to female clients.
After all, this pandemic has disproportionately upended women’s lives. And younger women, visible minorities, new immigrants and working mothers have taken the biggest hit in job losses. Many women who were lucky enough to hang onto their jobs also spent much of the past year pulling double duty with work and child care to keep their household finances intact.
Sure, some industry players have acknowledged women’s plight in economic reports, social-media posts or in personal-finance press releases opportunistically timed for International Women’s Day. But this new awareness of women’s financial challenges has yet to result in a sweeping shift in business strategy for most wealth managers.
Women’s financial dilemmas during this crisis should’ve been a clarion call for innovation. But instead of revamping their offerings to provide women with personalized financial advice, the wealth-management industry continues to treat them as an incidental marketing opportunity.
“Too many banks and firms rely on broad assumptions about what women are looking for, resulting in products, services and messaging that can feel superficial at best and condescending at worst,” reads a Boston Consulting Group (BCG) report that was released last year after the pandemic began wreaking havoc on the global economy.
So what should the wealth-management industry do to make itself more relevant to women? Stop treating them as an afterthought.
What women really need is customized financial advice to counteract the effects of social injustice such as the gender and race wage gaps they face in the workplace.
It’s infuriating. Yet many financial advisers fail to address these issues head-on with their female clients. Not only can they help women offset those income gaps with their investments, but also coach them on how to negotiate compensation for a new job or a raise for an existing role. (The industry should also use its collective power to lobby the federal and provincial governments to introduce tougher legislation to eradicate those income gaps completely.)
Financial advice cannot be detached from women’s lived realities. Maternity leave, child care, children’s education and women’s longer life expectancies can no longer be treated as secondary financial-planning issues. Some women may also have other considerations such as supporting relatives living abroad or facilitating family reunification in a multigenerational home. Same-sex couples, meanwhile, shouldn’t face ignorance and prejudice when setting financial priorities for their households.
“Too often, firms treat women as a homogeneous group, ignoring the vastly different needs and preferences of different female clients. In addition, banks commonly view the women’s segment through a marketing lens and not from a business revenue and growth perspective,” reads the BCG report.
“Most problematic are attitudes that reflect prevailing stereotypes. In interviews, many women told us that they feel ‘talked down to’ in wealth-management discussions and that advisers frequently assume that a woman’s wealth comes from her spouse or family.”
Much of that ignorance stems from women’s underrepresentation in the industry. Wealth managers must address systemic barriers in their workplaces.
Failure to correct these problems risks leaving serious money on the table down the road.
“Even though the COVID-19 crisis will undoubtedly have near-term effects, the larger trends in women’s evolving role in the world will continue,” warns BCG.
The consultancy’s prepandemic forecast predicted that the total wealth pool controlled by the world’s women would rise to US$93-trillion by 2023. Even when factoring in the effects of the pandemic, BCG’s worst-case scenario – which envisions structural damage to the labour market among other outcomes – projects women’s wealth to grow to US$81-trillion by that time.
The wealth-management industry needs to get serious about women. We aren’t buying your platitudes. So, for goodness’ sake, fellas, drop the financial feminine mystique.
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