It’s Time Financial Services Took Female Wealth Seriously

the future is female printed on a cushion held up by a woman

We’ve all seen the stats – women control a massive amount of wealth globally. Yet somehow, financial services has been remarkably slow to respond. This massive market segment has been underserved and underestimated for far too long.

The time has come for real change. The growth in female wealth and power is accelerating. Women’s needs and expectations of financial services are evolving. The industry can no longer afford to miss out on this hugely valuable opportunity.

In this post, we’ll explore four compelling reasons why now is the time to take female wealth seriously. Companies that embrace this today will flourish tomorrow. Those that don’t may get left behind…

What we cover

Women’s wealth is growing rapidly

The facts speak for themselves – women’s wealth is expanding rapidly compared to men’s.

Research shows that women are set to control £2.8 trillion of UK financial assets by 2025. That’s a 25% increase from £2.2 trillion in 2020. (Source: Barclays Wealth Management)

So why is this happening? A few reasons:

  • More women are entering higher-paying careers
  • Women are inheriting wealth as they outlive male spouses
  • Divorce settlements result in asset transfers to women

This means women are becoming an economic force to be reckoned with. Financial services firms need to tune into this if they want to keep growing in years to come.

Women want more than just investment performance

Here’s where financial services needs to up its game.

Many firms still treat women as if they invest exactly like men – focusing only on performance.

But women take a more rounded view to investing. Research shows women want investments that:

  • Align with their values (Source: Fidelity Investments)
  • Make a positive impact (Source: Morgan Stanley)
  • Benefit future generations (Source: UBS)

So women demand more purpose from their investments. Yet most financial advice still focuses on returns alone.

Firms that recognise women’s motivations beyond performance stand to gain their custom.

The industry is missing out by not engaging women

Here are some troubling stats:

  • Only 17% of women feel their financial needs are well served by the industry (Source: Insight Investment)
  • 3 out of 4 women feel underserved and lack confidence in managing money (Source: Fidelity International)
  • Women are 40% less likely than men to seek financial advice (Source: OpenMoney)

This “advice gap” means the industry is failing a huge potential market.

Closing this gap would obviously grow revenues. But more importantly, it would help create better financial outcomes for women.

So financial firms are missing a trick – both commercially and in terms of their duty of care. Which then circles back to the principles of the Consumer Duty – by not making efforts to understand and meet the needs of female clients, are financial services firms breaching said principles?

There’s still time to adapt to the changing landscape

The growth in women’s wealth represents a huge shake-up for financial services.

But there’s still time for firms to adapt. Here are some ways to make that happen:

  • Challenge outdated assumptions about women’s financial needs
  • Create more gender-balanced advisory teams
  • Set targets for the proportion of female clients
  • Build partnerships with networks supporting women in finance
  • Use marketing messages showing you understand women’s motivations
  • Review product design through the female investor lens

Make these kinds of changes now, and you’ll be well-placed to capitalise on women as the new financial power players.

Final word

The rise of female wealth is rewriting the rules of the financial services game.

Firms need to tune into this by understanding women’s investment motivations, closing the advice gap and repositioning themselves appropriately.

Take female wealth seriously now, and the commercial benefits will follow. But more importantly, you’ll be providing better outcomes for your female clients.