Even though they are becoming more successful and controlling a larger portion of the world's wealth, women are not being well served by the financial services industry and generally feel that their unique financial needs and preferences are not being taken seriously or properly addressed.
Is the industry doing a good job servicing the needs of women? "The short answer is no. We don't do a good job," says Richard Mills, co-head and executive vice president and managing director of BMO Nesbitt Burns.
A study by Nesbitt Burns determined that only about 30 per cent of women are satisfied with the service they're getting from the financial services business and almost 40 per cent feel that their needs are not being taken seriously.
And another study by the Boston Consulting Group found the financial services industry was the worst at servicing the needs of women.
"Those are pretty damning numbers," Mills said during a recent BMO panel discussion on women and wealth. "Clearly that's something we have to fix because it's the right thing to do and because there's an opportunity there. I believe women will emerge over the next couple of decades with a similar force to the growth we experienced in the investment industry in 80's and 90's with the baby boom generation as they came into their high savings years. It's something we're going to have to pay attention to."
Women today control 27 per cent of the world's wealth, about $20 trillion in assets, and one third of the all the wealth in North America, a figure that is increasing by about eight per cent a year. Women increasingly are acting as the chief financial officer of the family, with forty per cent of women today handling the daily spending and budgeting in their households versus 16 per cent of men.
"There is a tremendous opportunity to do a better job addressing the unique needs of women investors," Mills says. "We need to recognize the fact that women tend to make investment decisions differently than men do and they often act as CFO of their households and have a key role when it comes to managing the finances."
Women typically have different financial needs and approaches to investing than men.
"Female investors tend to be more conservative and risk averse," says Viki Lazaris, president and CEO of BMO InvestorLine. "They often seek out advice, prefer a more collaborative relationship and are more open to assistance."
According to a BMO study, only 16 per cent of women consider themselves aggressive investors compared to 30 per cent of men and just 13 per cent of women think they are impulsive investors compared to 21 per cent of men.
And whereas 47 per cent of men feel they are knowledgeable investors, only 33 per cent of women say they are.
"Another difference we see is that, although women may be better generally at managing their debt - our research has shown that they have lower debt levels - women will be much more cautious in planning and approaching their debt position and how they manage that, compared to men," Lazaris says.
Women appear to becoming more confident with online investing. In the last 10 years the percentage of female clients of BMO's InvestorLine has increased to 40 per cent from 14 per cent. They are checking their accounts more often, trading more and their assets are increasing.
"Gone are the days when the banks marketed almost exclusively to men who controlled the most important decisions," says Betsy Chung, vice president and head of marketing and client strategy with BMO Private Client Group. "Today's modern women have become more independent and affluent, so it's more important than ever for the financial services industry to communicate to women differently. While the industry has come a long way there is still plenty of opportunity."
Talbot Boggs is a Toronto-based business communications professional who has worked with national news organizations, magazines and corporations in the finance, retail, manufacturing and other industrial sectors.
Copyright 2013 Talbot Boggs
