Читать книгу Harness the Power of the Purse: Winning Women Investors - Andrea Turner Moffitt - Страница 12

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Money Left on the Table

After her father’s death, Melanie,* an equity partner at a prominent professional services firm, recognized she needed a new advisor to help manage her assets. At 48, she had amassed significant wealth, enough to bump her into the high-net-worth (HNW) category of investor—a fact she found astonishing. But she had also inherited her father’s estate, which was ridden with debt. And she had recently decided to take a sabbatical from her firm to explore launching a new business. In short, she wanted an advisor who could help her sort out the mess of her father’s estate and put her own money to work so that she could fund her aspirations.

What happened in her subsequent meetings with prospective firms sorely tested her trust in wealth management. As a HNW prospect, Melanie says, she anticipated personal attention and a committed effort to understand her: her current situation, her near-future plans, and her long-term goals and financial needs. Instead, she was shown proposals that repeatedly failed to take into consideration what she had spelled out in terms of her near- and long-term goals: taking a sabbatical and living off of her investments while she pursued her dream job. She also found herself repeatedly forced to counter assumptions about her wealth status. “Each of the advisors with whom I met assumed that my assets were attributable to my father’s estate, rather than my own hard work,” says this daughter of immigrants who put herself through graduate school on a $20 weekly food budget. The last straw, she says, was when she was encouraged to reallocate some of her current investments to incorporate higher-fee in-house products. Despite having no background in finance, Melanie could see the numbers didn’t add up in her favor. “I found it very insulting,” she says. “They kept talking about my ‘family’ wealth, my philanthropic ‘obligations.’ It was a total disconnect.”

In the end, Melanie wound up staying with her father’s institution and changing her advisor. She’s not particularly happy, but doesn’t wish to invest any more energy shopping for the ideal relationship. “The guys I was meeting with elsewhere had a real opportunity because I was eager to work with a new institution,” she notes. “But they didn’t want to listen or take the time to understand my needs.”

Untapped, or Tapped and Misunderstood

Female wealth isn’t connecting with the wealth management industry. Many women have advisors whom they don’t particularly trust or feel understand them, or they don’t have advisors at all. Many women we spoke with were seeking an advisor, but struggled to find one that understood them.

The majority of female wealth in the world is, in fact, currently unmanaged. Women in Asia are the most underserved: 61% in Hong Kong, 57% in India, and 56% in Singapore say they don’t have an advisor. When we segment the prospective female investor market by wealth level, age, and wealth source, certain populations emerge as particularly underserved. For example, in Hong Kong, fully 70% of female inheritors lack advisors. Fifty-three percent of female millionaires in the UK lack a financial advisor, as do 75% of women under 40 in the US. Female wealth, our data shows, is surprisingly untapped.

Figure 2.1

Do not currently have a financial advisor

(Women)

Most of those who do have an advisor, however, aren’t very happy. The vast majority of our sample feel their advisor does “not understand” them. This trend holds true across all subsegments of the female market, irrespective of age and asset levels. The wealth-generating segment in Asia feels strongly misunderstood: 86% of creators in Hong Kong, 83% of creators in Singapore, and 76% of creators in India report this disconnect. The under 40 segment and women with over $1 million of assets feel particularly misunderstood in the US (where 72% and 51% feel their advisor is out of touch). And women who inherit from their husbands are also dissatisfied, at least in the UK. More than 70% of widows fire their financial professionals within a year of their husband’s deaths.27

Figure 2.2

My advisor does not understand me

(Women)

Women who do have a financial advisor seem to be opting out of traditional private bank and broker dealer models. Our data shows a strong preference among women in every country except Hong Kong and Singapore for boutique firms, which tend to offer their clients a more holistic wealth management approach with customized planning, investments, and charitable giving strategies. In the US, women are 6.4 times more likely to work with a boutique firm than a private bank, and 61% more likely to work with a boutique firm than a broker dealer.

Figure 2.3

What type of advisor is your primary financial advisor?

(Women)

Our qualitative findings shed light on why. Focus groups and interviews we conducted in the US, the UK, and India with high-net-worth women and female investors relying on bankers and broker dealers portrayed an industry profoundly out of touch with its clients. Many complained of overt and unconscious bias. Sunita, a professor based in Mumbai, left a large international private bank because “every time I wanted to buy something or make a decision about my account our relationship manager would call my husband to make sure he knew.” Jennifer, a business owner in New York, described sitting down for a first meeting with a banker and being asked, “And what does your husband do?”

But bias is the tip of the iceberg. Women do not feel, as our data exemplifies, that the industry truly understands their differentiated value proposition or the way in which they make decisions. Several high-earning women complained of being shown product-centric pitches and detailed, transaction-based spreadsheets, when what they wanted was to see a portfolio reflective of and framed by their broader life goals. Uniformly, they felt sold to rather than listened to, and pushed to make purchases rather than encouraged to articulate goals that might help them align their investment decisions with their values. “I’m sick of having performance data shoved in my face,” a London professional declared. “Don’t give me the sales pitch. Don’t give me information that’s dictated by reporting systems and regulators. Ask me the right questions—what I do, whether I have kids, what are my goals—and then come back to me with solutions you can defend.”

Given the size of the purse, the disconnect women report represents trillions of dollars “left on the table” by wealth management firms. Inheritors’ dissatisfaction is particularly costly: when you consider that half of women over age 65 outlive their husbands by 15 years,28 and that these women are more likely than men to inherit the $41 trillion of wealth transferred in the US over the next 40 years,29 then losing even a small portion of them represents an awful lot of money left on the table.

The Real Cost of Unleveraged Wealth

Yet it’s not merely wealth management firms who pay, in lost revenues, for this failure to connect. Women, too, leave money on the table, not because they necessarily lack an advisor but because they’re prone to underinvest their assets. In the US, for example, women without a financial advisor hold, on average, 20% of their portfolio in cash, whereas women with an advisor hold, on average, only nine percent in cash.30 While keen to engage as decision makers, women often lack the confidence and know-how to fully leverage their own assets, our findings suggest. When those assets fail to grow, women’s ability to transform the world is stunted.

And women are the world’s change agents. According to the International Labor Organization, women represent the single most important poverty-reducing factor in developing economies.31 Consider the stunning impact women have had as microenterprise founders and operators. Microfinance lenders like Grameen Bank and Ashoka have instigated a wave of economic empowerment in the world’s most impoverished corners by empowering their borrowers—a staggering 96% of whom are women in the case of Grameen Bank—with “ownership of assets” and decision-making power of the deployment of those assets.32

As this book will highlight throughout, women want from their wealth an ability to enrich the world—both theirs and the world around them—by seeding new ventures, funding social enterprise, creating charitable foundations, and leveling the playing field for all in terms of access to education, employment, and capital.

So when women leave money on the table—when their assets remain unleveraged—the world, not just women and their families, goes wanting. In the next chapter, we’ll unpack some of the reasons why women and wealth management struggle to join forces.

* pseudonym used at interviewee’s request