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Introduction

My Story

On a warm summer afternoon in 2011, I joined a group of women working on Wall Street for lunch at a local café. After catching up on family and work, we plunged into a vibrant discussion of global challenges, kicking off with obstacles women face in finance. We bemoaned the stubbornly low numbers of female business leaders on the Street, and indeed across all industries. We debated why it was so difficult for our female entrepreneur friends to secure funding. Naturally, we landed on the perpetual discussion of the balancing act—career, family, and how to have it all.

But there was one topic we rarely touched on: money. Given our collective expertise as educated, opinionated women working in finance, I found this baffling. All day we discussed financing and investment strategies—just not our own and certainly not with each other. Privately, I had given a lot of thought to how we might invoke our capital and financial know-how to tackle our desire to solve some of the world’s thorniest problems. After some hesitation, I sensed an opening and proposed an idea, “What if we actually invested in the advancement of women?”

The table grew quiet. “Imagine if we invested in companies with diverse boards,” I said. “What if we created new capital sources for women entrepreneurs, or funded education for girls in emerging markets?”

I had made my case, to nods all around the table. The market, we knew, might serve as a powerful lever for change. Everyone was inspired. “I love the idea,” said a friend I will call Caroline. She paused. “But honestly, Andrea, I do not have time to tackle even the basics. I am embarrassed to admit this but I have three years of compensation sitting in cash.”

Another friend piped up. “Even though I have met with several potential financial advisors, I just can’t find one that I trust,” she said. “They cold-call me after I’ve gotten a promotion that’s made the press, a strategy I find extremely off-putting.” One after another, my colleagues chimed in with stories of similar challenges in managing their own finances.

After lunch I reflected on our conversation, marveling at the irony. We had weathered grueling years climbing the ranks at our firms; we had survived the 2008 downturn; we’d become financially independent with autonomy over decisions about our careers and families—only to hit a plateau in the long-term management of our own wealth and impact. The nest eggs we had worked so hard to accumulate were stagnant. Why were we not leveraging our earnings at the same pace as our male peers? I was deeply perplexed by our collective paralysis, given what it had taken to attain this economic power.

FINANCIAL INDEPENDENCE: A MEANS TO AN END

I grew up in the heart of Illinois, surrounded by rich farmland as far as the eye could see. Indeed, agriculture and education are at the center of my heritage—both my grandmothers went from their family farms to college in the midst of the Great Depression.

They passed that passion for education to both of my parents. My father, in particular, strongly wanted his children to attend the best universities possible, no matter the cost. He wanted us to be exposed to a world outside of our small town. My mother, a teacher, wanted this too, but worried deeply about our family finances. I can remember the concern that crept over her face when the subject would come up at the dinner table. Despite her razor-sharp intuition, she struggled, as many women do, to influence our family’s spending decisions, let alone investment decisions.

Observing my parents’ dynamic, and their difficulty to fund their aspirations for their family, I became determined to secure my own financial independence. I never wanted to worry about paying for college tuition for my children. I never wanted a lack of financial acumen or confidence to impede my own voice at the decision-making table.

While I did not know much about it, a career in investment banking seemed an obvious way to ensure both financial independence and acumen. So, with graduation approaching, I applied for jobs on Wall Street. I quickly acquired the thick skin I’d need to succeed during my first interview for an investment banking analyst role. Halfway through discussing my academic background with a senior leader at the firm, he stopped me mid-sentence, and said, “Now you are a pretty young girl. Why would you want a job in investment banking when you’ll just end up married with kids in a few years?”

My jaw dropped. No mock interview had prepared me for this moment. As tactfully as I could, I told him his question was irrelevant to a conversation about my credentials. I wish I had stopped there. But I was so embarrassed, I continued talking and assured him that, regardless, I had no intention of starting a family in the foreseeable future, and that I didn’t even have a boyfriend at the time.

I survived the interview circuit, secured my first analyst position, and for several years, put in 90-hour workweeks. To hone my leadership and management skills, I enrolled in the Columbia Business School MBA program. There, my aspirations started to change. I studied social enterprise and earned a master’s degree in international relations. I connected with mentors who broadened my worldview, professors and practitioners who inspired me. One of them was Bruce Usher, CEO of Eco Securities, a pioneer in the burgeoning carbon finance industry; as an adjunct he taught one of Columbia’s most popular courses: Finance & Sustainability. He practiced what he preached: in 2009, after going public, Eco Securities was acquired by JPMorgan Chase. Bruce’s inclusive teaching style and his ability to construct a flourishing career rooted in his values, planted a seed that I, too, could aspire to more than personal security for my family.

By my mid-thirties, I had the career on Wall Street that my 18-year-old self had envisioned. Certainly I had the acumen and the independence. But something was missing. I couldn’t pinpoint it at first. I tried running marathons; I travelled to Tanzania and Cambodia. Gradually, however, I realized what it was: I saw no one around me I wished to emulate. The values of my profession were entirely about performance, status, and the bottom-line. Men and women who might serve as mentors lacked that inspirational quality I saw in Bruce Usher during graduate school. They seemed to have sacrificed a great deal to fit the cultural mold. No one had harnessed, as Usher had, his or her intellectual might and financial power to drive an agenda larger than his/her own remuneration.

A MAD MEN WORLD

Even before I got married, I’d begun looking for a financial advisor, turning to my friends and colleagues for referrals. I didn’t succeed. Women I deeply respected and admired would tell me, “I don’t have an advisor,” or, “I’m not happy with my advisor, so I wouldn’t recommend him.” But once we were married, I was determined we find one. Since my peers had no one to suggest, we turned to my husband’s male colleagues. They gave us several names, and so we started courting them to find our match.

The first advisor we met with sent me right back to my first job interview. Because my husband also worked on Wall Street, this advisor directed all of his questions to him, not once looking at me. He ran through a list of discovery questions about our finances, family structure, and short-term goals, but never asked about our individual or joint aspirations. We moved on, working our way down the list of names, only to find this Mad Men encounter repeated. My husband was as baffled as I was by the 1950s stereotypical approach and salesmanship. No one probed our spending habits in relation to our financial values and goals, let alone offered the solutions that had inspired me in graduate school.

So by the time I sat down to lunch with my female peers in the summer of 2011, my frustration had annealed into something of a mission. As women—as wealth creators and leaders—we had the financial know-how and the will to harness our wealth to drive social change. We needed only to find partners committed to our vision, advisors who could steer us to investment decisions that accomplished it.

That they proved so hard to find suggested both a market failure—and an incredible market opportunity.

THE OPPORTUNITY

The fact that women are the world’s fastest-growing segment of wealth creators and controllers is not lost on the financial services industry. For the past decade, industry players have sought to measure and map this expanding segment of the wealth market. In 2010, Boston Consulting Group affirmed in its Leveling the Playing Field study that the female market was huge and growing—at an impressive rate of 16% in 2009, in the midst of the global recession.1 Similarly Merrill Lynch found in 2011 that the high-net-worth women’s share of the wealth market had risen by more than a tenth between 2008 and 2010.2 Goldman Sachs, focusing on the middle class in emerging markets, demonstrated that women are making more household financial decisions, particularly when it comes to consumer goods.3 A Citi report documented the rapid rise of female financial decision makers: between 2008 and 2010, the percentage of full-time working women who consider themselves “household Chief Financial Officer” grew from 68 to 73.4 A Barclays study considered behaviors of wealthy women in different regions around the globe, stopping short of explaining how geographic and other factors affect the way they approach financial planning.5 In one of the most comprehensive studies of women and wealth, BlackRock affirmed in a 2013 study that women were more likely than men to save and pay off debt, but were also more conservative and less confident investors than men.6

From these multiple studies, a profile of the female wealth market emerged. But it’s a frustratingly monolithic market that’s portrayed. Women vary depending on where they live, how old they are, whether they’re married or not, and whether they’re earning income or in charge of managing it. What wealth managers needed, I realized, was a more nuanced picture, with data that not only quantified women’s untapped wealth but also laid bare their unmet needs and gave voice to their desires in terms of services and products.

And I had an idea where to get it. While pursuing my master’s at Columbia, I had the good fortune to work with Sylvia Ann Hewlett, a Cambridge-educated economist whose think tank, the Center for Talent Innovation, was working on advancing women in the ranks of Fortune 500 companies like the banks I’d worked for. Sylvia had approached me to help her create an index to rate companies on the basis of their diversity in leadership.

I shared with her my observation about women, who in my experience not only wanted to work for companies committed to diversity, but to invest in them as well—to invest in alignment with their values and to amplify their agency. Sylvia immediately got it: the Center had just concluded research that quantified the impact of leveraging diverse talent to drive innovation and capture new markets. To their credit, several corporate partners (Deutsche Bank, Credit Suisse, Goldman Sachs, Morgan Stanley, Standard Chartered, and UBS) also got it, providing the resources needed to fund our project and connect us to many forward-thinking advisors and executives who’d given considerable thought to strategies that might capture the female market worldwide.

In 2013, she and I embarked on our research. With the research team at the Center, we surveyed nearly 6,000 investors with at least $500,000 of investible assets or $100,000 of income in the United States, United Kingdom, India, China, Hong Kong, and Singapore. In May of 2014, the Center published our findings in Harnessing the Power of the Purse: Female Investors and Global Opportunities for Growth, a report that quantifies the market opportunity that women represent. It details how women differ, not only from men but from each other. It makes clear how culture, generation, and sources of wealth (inherited or self-created) impact women’s investment approach. It lays bare what women want from wealth, and how they make decisions regarding its allocation and deployment. It measures women’s confidence, financial savvy, and risk aversion, testing presumptions that women are less financially literate and less risk tolerant—and if so, under what conditions. And it spells out what women want from wealth managers, and what advisors and the industry need to do to win their trust and loyalty.

A WAY FORWARD FOR WOMEN, WEALTH MANAGERS, AND THE INDUSTRY

This book takes our report one step further: it lays out strategies for advisors and institutions to leverage women’s wealth. Our research demonstrates that, in order to harness the power of the purse, change must happen at two levels: in the culture of firms, and in the behaviors of advisors on the frontlines with clients.

You will hear from men and women in the industry who are implementing innovative solutions—advisors and firm leaders who have learned to listen to women and offer differentiated client experiences that align women’s investments with their goals, their aspirations, and their values. You’ll meet industry leaders who are forging the kind of culture where female advisors can thrive and contribute their insights, deepening the pipeline of ideas that culminate in innovation for female investors. You’ll come to see how inclusive leaders and gender-smart advisors build successful businesses by driving market growth in ways that benefit us all, from boosting educational access to building trust with clients, from launching vehicles that invest in diversity to helping clients thrive wherever they live.

With this research, I’ve come to see my own meaning and purpose as a wealth creator: to connect the industry to its most powerful market, and to use the market to realize women’s most cherished goals. On that afternoon in 2011, my women colleagues and I enumerated a vision for the enriched world we wanted to create, a world where we could strike a balance between the bottom-line, enhance the lives of our families, and have a positive impact on society. I hope this book ignites a transformation for women investors, advisors, and the industry—and that it inspires you to be part of this virtuous cycle.