Transforming women's investment capabilities

Problem Statement Information

Category
Asset/ Wealth

Problem statement tags
women finance accesstofinance business womeninbusiness womenfounders SMEs womenSMEs accesstocredit B2B B2C Banking fintech technology Insurance payment wealth Financialinclusion FemaleEconomy Hackathon 2020AllianceHack

Detailed Description

Subcategory 1: Many HNW women are underserved by the asset management sector

Although women hold approximately 40% of global wealth, as per Credit Suiss’ 2018 Global Wealth Report, they are underserved by financial services providers and tend to have low satisfaction ratings. Women’s wealth is expected to increase, as they are inheriting at greater rates than men and getting closer to parity in education and entrepreneurship. Yet asset management companies have thus far failed to take a tailored approach to the women’s market. That many relationship managers struggle to communicate with women is evident in consumer behavior patterns; for example, 70% of widows leaving their financial advisor within 12 months of becoming a widow.

On the other hand, women tend to face multiple demands on their resources (paying for children, health, housing, etc.) and constraints on their time. They often deal with wealth management through informal channels--according to a 2016 report by Boston Consulting Group, 30% of HNW women list friends and family as their primary source of investment advice, compared to 11% of overall respondents)--or may not focus on their own financial security until they reach old age. This can lead to financial insecurity in retirement, a problem compounded by the pension gender gap, lower lifetime earnings, and longer life expectancies than their male counterparts.

While Wealth Tech is taking off, the mass market for women’s wealth and investment management is largely untapped. Successful solutions should earn the trust of clients and the public, provide relevant and timely information, build financial confidence, and offer a range of products that are good value and have strong values that speak to women’s widespread interest in ESG investing.

Subcategory 2: Many women lack confidence in long-term financial planning and investment skills

The Financial Alliance for Women's report, “The Growing Opportunity of Women of Wealth,” revealed that high net worth women have financial needs distinct from their male counterparts. At the same time, women are often under-informed about investment opportunities and lack confidence in their own financial planning abilities. 55% of high-net-worth (HNW) women “strongly believe” that they know less than the average investor. 82% of affluent and HNW women globally and across age groups believe that men know more about investing. This does not necessarily mean women are not interested or active in dealing with money; women are highly involved in managing expenses (85%) and paying bills (80%). However, 58% opt out of long-term financial planning – instead, they prioritize savings and short-term investments.

To build confidence in their own long-term financial planning abilities and drive financial security, women need trusted financial advisors that work closely with them to provide timely and relevant information through a range of consultative practices, including risk/reward trade-offs, gamification, and peer learning.