Why Do Women Stay Away from Money & Wealth Management?
Women have never liked finance and this thinking got inside me when we passed our 10th standard and were divided as per the subjects were chosen. Very few girls wanted to go with commerce. Many got around science and even humanities had takers but nobody liked commerce. Majority women have stayed away from finance, money, number crunching & management of wealth.
Recently I read and shared article that we lack women fund managers. The story is same in India as I have spent 16 years in wealth management business and have seen a handful of women managing portfolios.
Why do women depend on their father or brother or some office colleague to manage their money? Why don’t they hire a planner or an advisor like a man do?
Why do women don’t like to get around money, talk money and manage it as they artistically manage their homes?
In fact, when we started wealth management services, we devised a separate niche where we have customized services for the women investors. But I admit that till date we have received least number of calls under this service. Why?
(Our Specialised Service Exclusively for Women is called Pragati– Details)
Woman have economic powers now since they want a career now. This economic power of women is driven by a number of forces. See some emerging facts:
- Baby boomer women stand to inherit wealth twice in the coming years – first from their parents and in-laws and then from the husbands they statistically outlive. (Yes man average age nowadays is 80 and for woman, it is 85)
- Seven out of 10 currently married women will become widows, at an average age of 66.
- Education wise also women percentage of getting degrees is increasing. Gone are the days when armed forces or engineering colleges had vacant seats against women seats.
- At the same time, women’s earnings have increased. Over the past 30 years, the number of working women has doubled.
- And women entering the workforce today have achieved economic parity with their brothers and husbands.
- In most families, it is the father that deals with the financial advisor, it is usually the mother who holds the family together.In summary, women have more money now and are more actively managing it than ever before, and this trend is moving only one way. And yet…
Men are 2 times more likely than women to be approached by a financial advisor.
Chances are equally good that this is the first time you’ve read about the distinction between a men and women financial services. Yet we found a dull response. Why?
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Because our research says-
Because women and men have different neural pathways – literally traveling down different roads – the genders actually do think differently.
The pic below reveals what women and men think when it comes to making a financial decision. The women have right side dominating, so they think in a different way as right side emotions dominate their words and action.
Client satisfaction surveys throughout the other industry indicate a marked difference in the way male and female clients feel. Women often report being ignored in a variety of ways.
In Financial Planning also, the step treatment happens. There might be a chance that a female accompanied by his male counterpart had approached a financial advisor, and advisor has only taken views of the male.
Couples meet with advisors (both male and female advisors) who offer business cards and brochures to only the husband, address most – or sometimes all – of their questions to the man in the room and fail to answer the woman’s questions or address her concerns.
Many women report being treated with condescension (displaying superiority) -an experience related by not only widows who have not handled financial decisions in the past but also by female executives and entrepreneurs.
These interfaces have an everlasting impact on women’s neurons or thinking. These are the traits men and female investor have and want to see in the person they are dealing with.
Because of differences in the biology of male and female brains, more women than men need an advisor who takes the time to get to know and truly understand their needs.
They can work with an advisor they know and trust. What they receive, instead, frequently is a “sales pitch.”
Several studies express that women report a lower level of self- assessed financial acumen than do men. Women count themselves less. This is because they have never been included in the family before marriage or after marriage.
There is also an increased willingness on the part of women to admit what they don’t know.
In any case, women investors dislike the overuse of financial jargon and seek a comprehensive understanding of their financial position and the options available to them. Completely not selectively.
Women today are juggling career, children, and aging parents. On the other hand, they vehemently dislike feeling pushed into making decisions. They look for a trusted person who can strike the balance when it comes to meeting her financial needs and not wasting her time.
I admit women are exceedingly disappointed with the financial services industry. In a well-known study conducted in 2009 by the Boston Consulting Group, 500 women with investable assets of at least $250,000 expressed a dramatic level of dissatisfaction with their private banking and investment experiences. If a similar survey is done in India, I think many Financial Planning firms will be ashamed of the results.
But still – Yes we do it. For me, it is like a mission of achieving financial independence for our investors. And, the woman is a large number where we can create a difference. And another reason that my wife suggested is:
Women are referral machines. A woman speaks 30% more words per day than a man. When she is pleased with a product or service, the likelihood that she will tell people, is greater than that of a similarly pleased man. It is well-known in the industry that the most successful practices are fueled by referrals 😇.
But my experience says, they are coming ahead, they are taking it personally and they should.
Share what your think on this topic. And don’t forget to share or forward it to a woman who need to read this article.