Way back in 1817 the New York Stock Exchange (NYSE) opened. The grand building on Wall Street with its imposing pillars and iconic bell set the standard for how an exchange should operate. The NYSE became an institution of excellence. Although some of the decisions that the made were highly questionable. For the first 126 years of the NYSE’s existence women were banned from the trading floor.
Why? Because women were deemed to be too “emotional and spontaneous”.
Thankfully such attitudes towards women’s abilities have changed considerably. Women are very much active in the world of finance both on a retail level and a corporate level. One in four women now out-earns their partners and 45% of entrepreneurs are women. Similarly, women are not just making money, they’re inheriting it. Over the next 40 years women are estimated to inherit a staggering 70% of intergenerational wealth. Many of these women will be double inheritors; inheriting wealth from their parents and their spouse. Overall this means women are participating in the economy and interacting with the financial services industry like never before.
So is all well? Not quite. Female clients are overwhelmingly dissatisfied with the service they are receiving from financial institutions. Meanwhile, wealth clients feel patronised and ignored while small business owners believe they aren’t properly listened to and female CEOs consider themselves underestimated.
The Boston Consulting Group (BCG) conducted a global survey of hundreds of women. The study found women are more dissatisfied with the financial sector than any other sector. Likewise, another study by Fidelity discovered that 70% of women would leave their financial adviser (FA) within a year of being widowed because they didn’t feel like they had a trusted relationship with that adviser.
These findings should set alarms bells ringing for any client facing financial professional. Women are now a major part of the market and they are not happy!
There seem to be key themes in women’s dissatisfaction:
Lack of understanding
While it is wrong to stereotype, there are some respects in which female and male perspectives differ – and this is particularly true when it comes to money and finance.
For example, many women view money like a static pool of water which will one day dry up completely. This is contrary to the view that lots of men have that money is like a dynamic river, which will go up and down. Each perspective involves a different take on risk appetite, financial objectives and the type of products and services that are appealing.
A non-customised service
There are a great swathe of common practices and traditions which take place in finance that are wholly inappropriate for female clients – and I’m not just talking about “gentlemen’s” clubs or golf sessions!
For example it’s pretty common in private wealth management to talk to clients about how their investments have performed against a benchmark. Men tend to have more of a competitive streak and so appreciate this type of analysis. Women are far less interested in competition and more concerned with their own personal goals. So when looking at the performance of their portfolio they’ll want to explore how its performance is enabling them to reach their financial goals and how this will impact their broader life goals.
Being ignored
Respondents in the BCG survey state that financial service providers tend to speak to their husband or their male colleagues in meetings. And crucially, this sense of being neglected may not simply be down to not being spoken to. Women are master observers and notice the tiniest of details such as eye contact, the angle of a chair, the length of a handshake, intonation and tone of voice. The tiniest piece of behavioural evidence suggesting they are not being addressed will be picked up.
Such behavior isn’t just dismissive, it makes no commercial sense. Women influence around 85% of household purchasing decisions and are moving up the corporate ladder in every field.
Being patronised
One respondent to the BCG survey stated: “I would change how financial service reps talk down to women… Being in the financial services industry, I find these attitudes extremely frustrating.”
Women also suffer from age discrimination more acutely then men. This can mean young women being treated like little girls who need to be looked after and older women being treated like confused dears who are somewhat past it.
Time
Women need time in several different ways. Firstly they need time to develop a relationship with an adviser because they prioritise relationships over goals. They want an adviser who they trust, who listens to them and demonstrates that they understand their needs.
So the for the firms who invest time into understanding their female client base the return on investment will be huge.
Secondly, they need time to share information. Because they get personal quickly and think holistically, they like sharing details and broad conversations. So in an initial consult meeting an adviser may ask a specific question such as “How much do you earn?”. A male client is more likely to simply give a specific figure. A female client with her holistic approach and her desire to create connection is more likely to say something like: “Well I earn X amount but that is likely to go up at the end of next year. Also I earn a certain amount from the rental properties that I have. The things with those is that…”
When women are denied this space to communicate and build a rapport, it contributes to their sense of dissatisfaction.
But how has the level of dissatisfaction felt by women for the financial services industry come about? Why are educated and skilled financial professionals not able to meet the fundamental needs of their female clients? To put it simply the reason is that the financial services industry is an industry designed by men for men. Financial professionals are interacting with their female clients in the same way that they would their male clients. For women, this just doesn’t cut it.
Financial institutions need their people to meet the needs of their female clients. Whether working in retail, corporate, investment or private banking, bankers need to understand that women are different and that they demand a different type of service. Winning and retaining a female client requires a different approach.
Even though women are currently experiencing high levels of dissatisfaction with their financial service providers, the good news is that when a firm does engage a woman, she is more likely to remain a loyal customer. Also female clients will generate referral after referral. Once trust is established women are compelled to refer friends, family and colleagues.
So the for the firms who invest time into understanding their female client base the return on investment will be huge.
