Wealth managers need to adjust their approach to better serve women

By Elspeth Goodchild on Monday 8 April 2019

OpinionSavings and Investment

Women have historically been underserved in wealth management, but it’s time advisors open their eyes, says InvestCloud's Elspeth Goodchild.

Across the globe, women are increasingly becoming more powerful and independent in controlling wealth - both on an individual level, as well as with regards to managing the wealth of their household. It is to this demographic that wealth managers are now turning their attention, only to discover that their approaches are terribly outdated.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. Fortunately, digital platforms play a crucial role in helping them, particularly in areas of engagement and empathy.

Women defy simple segmentation and often have complex financial needs. They live longer, frequently deal with pay inequity, and on top of all this they are often the ones caring for multi-generational family members such as children and elderly parents. As a demographic, they pay close attention to their finances and become skeptical if their advisors are not in tune with them. For advisors to gain trust and truly serve these clients, they must demonstrate real understanding of their values, by building systems based on empathy. Specifically, for an increasingly younger and more tech-savvy demographic, this must be digital empathy.

Dealing with perception

Financial advisers view themselves as a trusted resource for their clients - 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 per cent 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 per cent in Hong Kong, and 44 per cent in the U.S.

How can wealth management firms change this perception? To begin with, it can be addressed by hiring more women to build a more diverse culture within their practice. Representing their clients in their own workforce will change the perception of investment management being male-centric thus demonstrating real understanding by creating services directed to this powerful, yet under-represented group. An emphasis on security and privacy is a key differentiator for women when choosing services, and so are high-quality human interactions.

Emotional engagement is key

The second issue is leveraging technology to better engage your clients. Improving engagement on a personal level must apply across the entire client base; a firm’s female clients are no exception. Historically, financial advisers have been exceptional at delivering personal engagement; cultivating relationships with clients, and developing an understanding of their unique issues and goals. But this needs to translate into a digital environment that includes digital empathy through persona management where each client feels their financial needs are understood on a private level.

Before you can successfully connect with clients digitally, you must first be able to engage with them emotionally. This means employing behavioural science functions that allow managers to learn from their clients. This can be achieved by harnessing data; applying algorithms that automate customer servicing.

Unique experiences are rooted in the right use of data

Each client’s digital experience must be uniquely designed. Digital engagement applications should be used to capture data, shedding light on clients’ 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? Answering these questions will inform the type of experience and platform you should deliver for them.

On an ongoing basis, you need to continuously gather and use data, to keep informing that digital experience and improve empathy. Data needs to be gathered at all touchpoints – from how many times a client logs in to the platform, to what they view and what function they use often. This needs to be captured and used to map out their journey, ensuring that the adviser can anticipate needs in a timely manner. This is particularly true for goals-based planning.

Digital engagement technology can help wealth management firms better serve their clients and enable mass automation, providing advisors with the right tools to do more with less. Digital empathy benefits all clients but will have the most immediate and profound impact on female clients. In these changes, women can feel that they are heard and represented by the people they are dealing with at a management level within firms. Additionally, they will also feel that the digital experiences they use for everyday interactions resonate with their needs. This represents a tremendous opportunity for such firms to automate, and engage one of the most important demographics in our industry.

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