Comment: How wealth managers can better serve female clients

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Comment: How wealth managers can better serve female clients

The wealth management industry has long been male dominated. Not for much longer, says Elspeth Goodchild.

Not only have most financial advisors typically been men, it is often assumed that men are always the ones managing the household's finances. But now more than ever, women are increasingly becoming more powerful and independent in controlling wealth - both on an individual level as well as managing the wealth of their household.

Wealth managers are now turning their attention to this demographic, only to discover that their approaches are terribly outdated. This potentially represents a tremendous opportunity for wealth managers - if they can learn how to better service half of their existing and prospective clients. Digital will play a crucial role here.

Financial advisers view themselves as a trusted resource - whether it is dealing with student debt or saving up to buy a property. Yet, many women view the investment industry as male-oriented and unwelcoming."

Women's financial needs and situations are increasingly more complicated than their male counterparts. They are living longer but frequently deal with pay inequity. Women are also often the ones caring for multi-generational family members such as children and elderly parents. So, it's no wonder they become skeptical if their financial advisors are not in tune with them. For advisors to gain trust and truly serve these clients, they must demonstrate true understanding by building systems based on real empathy. Specifically, and for an increasingly younger and more tech-savvy demographic, this must be digital empathy.

The problem of perception
The first problem in how advisors have been failing women is one of perception. Financial advisers view themselves as a trusted resource for an individual - whether it is dealing with student debt or saving up to buy a property. Yet, many women view the investment industry as male-oriented and unwelcoming. A recent study by Ernst & Young found that 73% of female wealth management clients in the UK felt their wealth managers or private bankers misunderstood their goals and could not empathize with their lifestyle; this number was 86% in Hong Kong, and 44% in the U.S.

Wealth management firms can address this by hiring more women to build a more diverse culture within their practice. Reflecting their clients in their own workforce will change the perception of investment management being male-centric thus help demonstrate real understanding by creating services directed to this still under-represented group.

Digital diligence
The second issue is one of digital engagement. Improving engagement on a personal level must apply across the entire client base; a firm's female clients are no exception. Fortunately, financial advisers are already exceptional at delivering personal engagement. They cultivate relationships with each client, developing an understanding of their unique issues and goals.

Yet this needs to translate into a digital environment that includes digital empathy through persona management. There are a number of client portals on the market that have been designed by women for women.

The same E&Y study states that 62% of women are willing to consider moving to another wealth manager versus 44% of men and that women are more open to financial automation tools. When it comes to client experiences and digital engagement, women have distinctive preferences: more emphasis on security, accuracy of data and privacy; a greater appreciation of high-quality human interactions; more openness towards digital technology; and a greater willingness to share their experiences online.

But to successfully connect with customers digitally you must first be able to emotionally engage with them. This requires employing behavioural science functions that allow managers to learn from their clients. To do that, you need to harness your data, applying algorithms that automate customer servicing.

Each client's digital experience must be unique through design. Digital engagement applications should be used to capture data, shedding light on a client's needs and developing a predefined persona that applies to them. Do they prefer content or are they driven by numbers? What is their age, level of wealth, and life goals? Answers to these questions will inform the type of experience and platform you should deliver for them.

The next stage requires gathering and using data to keep informing that digital experience and improving empathy. Data should be gathered at all points - from how many times a client logs in to the platform, to what they view and the information they offer up. This needs to be captured and used to map out their journey, while ensuring that the adviser can anticipate needs and effectively service the client. This is particularly true for goals-based planning and the algorithms that mine this data.

There is a tremendous opportunity for wealth managers who embrace digital engagement technology. Digital empathy benefits all clients but will have the most immediate and profound impact for female clients. In these changes, women can feel seen, heard and represented by the people they are dealing with at a management level within the firms, as well as the digital experiences they can use for everyday interactions.

Elspeth Goodchild is EVP and general manager for Europe at InvestCloud