Why Wealth Management Needs More Women

Robbie Lawther Reporter London 8 March 2018

Why Wealth Management Needs More Women

On International Women's Day, this publication continues to examine women in wealth management, and how firms are looking to improve the issues surrounding female advisors and clients.

As celebrations start for International Women’s Day, debate about how far women have come in the wealth industry continues. Figures in the industry show they have made strides but there's still big room for improvement.

Dividing lines between male and female wealth managers remain. For example, Barclays said female employees at Barclays International, which houses private banking, earn on average 48 per cent less than their male counterparts. And according to a study by analytics firm Cerulli Associates in January 2017, women represent only 15.7 per cent of the 310,504 financial advisors in the industry across the US, a country where one might assume the situation of women was more advanced.

But there are some firms who are trying to equal the playing field, including Royal Bank of Canada, which signed up to the Women in Finance Charter in March 2017, in a bid to promote gender equality across its workforce as well as the wider financial services industry.

This publication sat down with RBC Wealth Management’s Ross Jennings, head of sales and relationship management across the UK and British Isles, and Katherine Waller, director based in London, to discuss such issues.

“As a headline statement: there are not enough women advisors in wealth management,” said Jennings. “There is clear evidence to suggest that above a certain age female clients want to be looked after by a female advisor. But this presents an issue for our industry as the pool of women coming into wealth as a career is not as high as it should be and there is an equalisation that needs to happen. I don’t know what the drivers are that are keeping women away but our industry needs to look at the factors as to why they are not coming in." 

Jennings, who has been with the firm since November 2010, continued: “At the moment our book of clients is broadly 60 per cent male, and 40 per cent female, across all of our individual accounts. I think to have a nearly 50/50 split in clients; you need to have a broadly 50/50 split in relationship managers, as it makes sense.”

Many firms are starting to tackle the lack of women in the sector by equalising the numbers of male and female relationship managers. Julius Baer, for example, boasts a 41.2 per cent ratio of women/men at the entire company, as reported by this publication. However, according to the Women in Financial Services report by Oliver Wyman in June 2016, at the current rate of progress, it will take another 30 years for executive committees in the financial services industry globally to reach 30 per cent female representation.

Both Jennings and Waller discussed the benefits of working as a team at RBC WM, with teams featuring both male and female relationship managers.

“I think wealth management has changed at a rapid pace,” said Jennings. “Since November 2016, around 45 per cent of our new hires at the relationship manager level have been women. We also think about client-facing support as well, and that number does go up to around 50 per cent of both male and female hires. We believe in the trend, so let’s keep a balance between the two rather than going one way or the other. We ensure our clients are well supported, maybe by one male and one female relationship manager. You are able to hedge your position with a team-based approach. And in an ideal world, you would want coverage from both male and female advisors within each team.”

Waller, who joined in 2012 from HSBC Private Bank, said: “Having a team approach gives the client more consistency. The continuity of a team supporting a client is really important. Having both genders and multi-generations working in a team really helps the client. For example, when I was off on maternity leave, I knew my clients were very well looked after by members of my team.”

There are clear benefits to a wealth management firm in winning new business by having a diverse staff range. In 2017, CFA Institute found, during a study called the Value of Premium Wealth Management, that in North America, ultra-high net worth clients are looking for advisors that both have skilled expertise, but also have “emotional intelligence” to understand their clients’ needs.

And Jennings feels this is what more female relationship managers can add to the industry, and speaks about the different qualities women have to men within the sector.

“I think women are better at the emotional wealth management approach, and I sit here as a man and I can admit it,” said Jennings. “A lot of the ingredients for emotional wealth management are empathy and caring, and having time for clients. And women tend to do that better than men. In my experience, female wealth managers can be more tactfully audacious when dealing with male clients; they can ask questions that a man would never ask another man. It is a real point of differentiation, and we sometimes overlook that. One of the things we encourage people to do is shape their thinking, and sometimes that means asking the more difficult questions, which women seem to handle better.”

Female clients
The world is anticipating the great wealth transfer which will see a reported $30 trillion move from older generations into the hands of Millennials over the next few years. But over the last few years, there has been a great wealth transfer that has seen women join the wealthy party.

In April 2015, BMO Wealth Institute said that women are the primary breadwinners in 40 per cent of North American households. In the US alone, women control $14 trillion in personal wealth and that number is expected to grow to $22 trillion by 2020. Also, UBS found that the world's female billionaire population grew faster than the male billionaire population, rising by a factor of 6.6 compared to a factor of 5.2 for men. 

During the interview, Waller discussed how women are starting to affect the wealth management sector, and what high net worth female clients are looking for from their wealth managers.

“I think there are a lot more women earning considerable wealth these days, but whether that is translating into more women investing, there still seems to be a lag,” said Waller. “But when they do typically women have different buying behaviours, and a different style in terms of their priorities for their wealth. Conversations with female clients have a lot more empathy behind them. They tend to be driven for what they want for the future, for their children and grandchildren, rather than just growing their personal wealth for today. Some, 92 per cent of women have started or intend to start arming their children with an education in wealth and money. The conversations are based around financial planning, not just how you grow your investments and leverage.”

Waller added: “Typically, you tend to find more than half of women will want to seek more than one opinion and will have a conversation about gaining that knowledge. It is very much knowledge-based rather than driven by quantitative measures, they want to really understand it and know that the people they are working with understand it as well.  From our wealth transfer report, we found around 36 per cent of women are more likely to involve an advisor, whereas 49 per cent of men will handle their investments on their own. Also 55 per cent of women rely on knowledgeable individuals, like their relationship managers, to learn more about wealth. That shows you the value that women place on advisors when they hold conversations around planning for the future of their wealth.”

Catering for female clients
Firms have started to cater for female clients in a various number of ways. In January 2017, the world’s largest wealth manager launched UBS Unique, a new programme which aims to better serve female clients.

However, not all firms are not doing a great job; according to a 2017 EY report titled Women and Wealth, around 73 per cent of women wealth management clients in the UK feel advisors misunderstand them. A recent study by Kantar showed that financial services firms miss out on more than £130 billion ($179 billion) per year in revenues by ignoring demands of female clients. 

Waller discussed the ways in which the firm as looked to accommodate female clients, and how firms should not split up men and women.

“We are definitely more gender-neutral in the way we manage clients,” said Waller. “I think by virtue of creating separate events or marketing you alienate some women, especially those who are in powerful positions and don’t want their gender to differentiate how they are treated as clients. They want relationship managers to understand what they want from their strategy but they don’t want to be seen any differently. It is important to them that they haven’t been seen any differently throughout their careers. There are sometimes separate women’s events for introducers of business in the Channel Islands. That said men are very welcome.  If there were men-only events, I have no doubt this would raise issues.”

Lastly, Waller and Jennings gave their views on what they want to see from the women in wealth management campaign.

“I would like to be able to empower more people to challenge wealth emotionally and gather the insight they need to make decisions for the future,” said Waller.

Jennings added: “From my perspective, it’s about having that balance of genders, and being aware of the ever-changing environment. It is not just having a blend of men and women; it’s being able to service the sub-sets of our clients and their unique needs as well. At the moment having a balance is a good hedge for us, and it allows us to adapt to change.”

This publication researched into the world of women in wealth management, and published a report in partnership with Boston Multi Family Office in December. The report called Winning Women: Key Insights for Wealth Firms Targeting Today's Dynamic Female Clients can be found here.

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