How Wealth Managers Can Help Further Female Empowerment
Exploring what HNW women want from advisors and what it means for wealth managers who want to serve these clients better
I remember a chance encounter with one of my first female clients. I was a young investment advisor, new to the game and desperate to both cut my teeth and build a thriving book of satisfied clients. It was one of those sweltering hot days in the middle of a real European summer where temperatures averaged thirty degrees Celsius and above when my desk phone rang. On the other end of the line was my team leader. And he needed my help.
It turned out there was a potential female client who was relocating to a new jurisdiction and therefore needed a new investment advisor - one familiar with the nuances and idiosyncrasies of the new jurisdiction. And I so happened to be one of his advisors with subject matter expertise in this particular jurisdiction. This potential client was an Ultra High Net Worth (UHNW) individual and had a confirmed need for the investment advisory services I was hired to provide. And my team leader was on standby to facilitate an introduction. I was being handed the opportunity to build my client book on a platter. It couldn’t be better.
But, there was a catch. The client had already been introduced to one of my colleagues - an excellent male investment advisor with jurisdictional expertise similar to mine and let’s just say that sparks did not fly between the two of them. I was being considered as a last ditch attempt to retain the client business. As I prepared for the client meeting and reviewed the notes, I gathered that the client was demanding and risk-averse. I was ready to meet with the client.
After meeting the client, I left with two observations: she was neither demanding nor risk-averse.
When I met with her, we reviewed her existing portfolio and talked about her investment philosophy. We went through several investment ideas and I explained the risks using real-life examples, leading to a very constructive conversation. At the end of our discussion, it was clear to both of us that the client was willing and able to be opportunistic and to take risks to achieve her investment goals.
I also observed a disparity in perceptions. What one might have construed as demanding could equally be interpreted as a manifestation of profound curiosity. Within the context of our meeting, I observed that the client's inquiries functioned as a mechanism for clarifying the alignment of each investment with her overarching objectives and her intrinsic values.
As wealth managers, it is imperative for us to understand our clients' investment expectations. Extensive research, often born from surveys and theoretical examinations, at times suggests that women exhibit a more conservative approach towards risk. However, when looking at research conducted within the realms of real-life financial decision-making, gender-related differences in risk appear nearly inconsequential.
From my own personal observation as a long-term investment advisor, it is not exclusive right of female clients to panic the most during market turbulence.
In principle, risk appetite isn't a matter of gender. However, this doesn't imply that women approach investments precisely as men do. Instead, they often seek a panoramic perspective on all facets of investing, with the view of making informed decisions that are aligned with their investment philosophy and intrinsic values.
This holistic outlook reflects a deeper consideration of the interconnected factors that shape our investment choices. It underscores the importance of understanding the nuanced and multifaceted aspects of investment decision-making, that enables individuals, regardless of gender, align their investments with their core principles and values.
In our capacity as wealth managers, we hold a significant role in advancing female empowerment. We have a unique opportunity to weave a deep understanding of and response to women's needs into the very fabric of our client advisory models. This entails creating a sophisticated segmentation that can keenly identify and cater to the specific preferences of women.
By doing so, we go beyond traditional financial services. We embark on a journey to empower women in their financial endeavours, acknowledging the uniqueness of their perspectives and requirements. It's not just about inclusivity; it's about tailoring our approach to ensure that women's financial aspirations and ambitions find the support they rightfully deserve. This commitment to inclusivity and tailored service is our contribution to a more empowered and equitable financial landscape.