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142, 14th Floor, Maker Chambers VI, Nariman Point, Mumbai - 400021

7, Avighna House, 82, Dr. Annie Besant Road, Worli Naka, Siddharth Nagar, Worli, Mumbai, Maharashtra 400018

SEBI Office: Plot No. C4-A, 'G' Block, Bandra-Kurla Complex, Bandra(East), Mumbai - 400051

18B106, 18th Floor, Berger Delhi One, Sector 16B, Noida - 201301

SEBI Office: NBCC Complex, Office Tower-1, 8th Floor, Plate B, East Kidwai Nagar, New Delhi – 110023

Bengaluru

Level 5, No. 501, Prestige Garnet, 36, Ulsoor Road, Bengaluru – 560042

SEBI Office: 2nd Floor, Jeevan Mangal Building, No.4, Residency Road, Bengaluru - 560025

Chennai

Workafella No.10, Uthamar Gandhi Salai, Nungambakkam High Road, Nungambakam, Chennai - 600034

SEBI Office: 7th Floor, 756-L, Anna Salai, Chennai - 600002

Unit No. 701, A Wing, 7th floor, Sunteck Kanaka Corporate Park, Patto, Panjim, Goa - 403001

SEBI Office: 6th Floor, EDC House, Atmaram Borkar Road, Panaji - 403001, Goa

1-111, Raheja Woods 8, Central Avenue, Kalyani Nagar, Pune, MH 411006

Kolkata

916, PS Arcadia, Level 9, 4A, Camac Street, Kolkata 700016

Why wealth managers need to recognise the growing influence of women?

Article • Investment Management

Women are half the world’s population yet they remain very underserved by their wealth managers. Most wealth managers use a one-size fits-all approach and have not unlocked the full potential of this segment.

SOUMYA RAJAN
Founder and CEO of Waterfield Advisors
Mar 1, 2021 | 4 minutes read
   

A compelling segment

Women control one-third of the world’s wealth. In a 2020 report, Boston Consulting Group (BCG) estimates that women are adding $5 trillion globally to the wealth pool every year. Their study further went on to say that Asia (excluding Japan) will be the fastest-growing hub of wealth creation for women, with Asian women adding more than $1 trillion per year to their total wealth over the next four years. The continuation of this growth would see Asian women holding more wealth assets than any other region in the world, barring North America, by 2023. Other studies estimate that over the next 25 years, we will see a significant inter-generational wealth transfer globally—worth $68 trillion—for which a disproportionate cohort of inheritors will be women. These are compelling statistics and wealth managers need to recognise the growing force of women as a client segment.

To win in this segment, wealth managers will therefore need to develop meaningful propositions that address the unique needs of women. This cannot be just another marketing ploy, but one that has substance. Unlike men, women are more prone to specific life events and face different challenges—the gender pay gap, the need for flexible working conditions, seamlessly returning to work, and longer life expectancy.

A proposition for women needs to revolve around three main areas—goal-based investing for women to feel financially secure for themselves and their families, developing financial literacy skills, and working towards ensuring their wealth has a purpose.

Goal-based investing

Women clients are very focused on goal-based investing. These goals can be for setting up a new line of business, setting aside capital for philanthropic causes, educating their children or supporting a comfortable lifestyle in their later years. Once these goals have been established, we have noticed that the investments themselves reflect a preference for products that have a higher degree of certainty for achieving these financial goals. Given the greater unpredictability of life events for women, ensuring greater reliability on financial outcomes is a very important criterion in investment decision making. This should not, however, be construed as a lower risk tolerance, which is often the mistake made by most wealth management firms.

Financial Literacy

For women professionals and inheritors, financial literacy is one of the biggest challenges to overcome. While many women may be financially independent, they remain financially illiterate. Wealth managers must work to educate women on a range of financial matters through knowledge building platforms and workshops. The best of women entrepreneurs are uncomfortable at the prospect of approaching a bank for a loan, negotiating terms with a Venture or Private Equity investor or investing their own money. For women inheritors, the challenges are even more daunting because they may not have been involved in any financial decision making until they are forced to confront an unforeseen reality. A wealth manager should encourage women to participate in the family business and family investment discussions. There is no silver bullet to address this issue, but awareness is a good starting point.

An encouraging trend is that younger women are more financially literate than older women. This bodes well for the future. However, during a transition period between generations, many older women with greater life expectancy than their spouses may find themselves having to deal with multiple financial matters. Wealth advisory firms can play a crucial role to help women inheritors manage this transition.

Wealth with a purpose

Women are more conscious of the societal impact of their investment choices. This shift has accelerated through the Covid-19 pandemic and women, along with the next generation, are driving the responsible investing agenda. A focus on Environmental, Social and Governance (ECG) impact to assess the suitability of a financial product for a client, or carving out specific capital pools for direct investments into companies that mirror the purpose driven agenda of our women clients can be carried out.

Wealth management firms will have to elevate their conversations materially if they want to capture the share of wallet from women and be meaningful to the wealth journey of their women clients. This isn’t just about being good for society, it’s about being good for business.

From the Vault

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Your legacy awaits



Topic of Enquiry*:



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*Kindly note that this form does not operate as a job portal, and the HR Team will not receive information regarding your candidature
Follow Us
linkedin youtube twitter instagram
Follow Us
linkedin youtube twitter instagram
Offices

142, 14th Floor, Maker Chambers VI, Nariman Point, Mumbai - 400021

7, Avighna House, 82, Dr. Annie Besant Road, Worli Naka, Siddharth Nagar, Worli, Mumbai, Maharashtra 400018

SEBI Office: Plot No. C4-A, 'G' Block, Bandra-Kurla Complex, Bandra(East), Mumbai - 400051

18B106, 18th Floor, Berger Delhi One, Sector 16B, Noida - 201301

SEBI Office: NBCC Complex, Office Tower-1, 8th Floor, Plate B, East Kidwai Nagar, New Delhi – 110023

Bengaluru

Level 5, No. 501, Prestige Garnet, 36, Ulsoor Road, Bengaluru – 560042

SEBI Office: 2nd Floor, Jeevan Mangal Building, No.4, Residency Road, Bengaluru - 560025

Chennai

Workafella No.10, Uthamar Gandhi Salai, Nungambakkam High Road, Nungambakam, Chennai - 600034

SEBI Office: 7th Floor, 756-L, Anna Salai, Chennai - 600002

Unit No. 701, A Wing, 7th floor, Sunteck Kanaka Corporate Park, Patto, Panjim, Goa - 403001

SEBI Office: 6th Floor, EDC House, Atmaram Borkar Road, Panaji - 403001, Goa

1-111, Raheja Woods 8, Central Avenue, Kalyani Nagar, Pune, MH 411006

Kolkata

916, PS Arcadia, Level 9, 4A, Camac Street, Kolkata 700016