International Women’s Day (IWD) is celebrated on March 8 every year and this year’s theme is Balance for Better. IWD celebrates the social, economic, cultural and political achievements of women and there is a lot to celebrate. The day also marks a call to action for accelerating gender equality.
In celebration of International Women’s Day, we explain the value of gender diversity and how businesses, particularly the financial services can achieve it to close the money gaps.
Women are brilliant for business but shockingly underrepresented in financial services as either advisers or clients.
Women make 95% of all household purchasing decisions: they’re the savviest shoppers around! But for some reason, when it comes to financial services – including savings and pensions – female clients are often pushed to the back of the queue or defer to father and partners for advice.
This means that women-focused financial products have massive potential for growth. What’s needed is better marketing and engagement to ensure women make the most of their money.
Why would I want to attract female clients?
Long gone are the days when a woman stayed at home and her husband brought in the money. Today 56% of UK households have a female breadwinner and this figure will only increase as the gender pay gap narrows.
Women are also now a third more likely to go to university than their male counterparts, so when they do enter the workplace they will be better qualified for well-paying jobs.
The bottom line is that women have the means to ensure businesses remains successful as the finance industry evolves.
How to connect to female clients
Research firm Kantar found that women were put off by the “aggressively masculine” world of financial services, often feeling that they were ignored.
In order to counteract this perception, we need to:
- Treat everyone – male or female – with respect;
- Give answers that are clear but not patronising;
- Be personable, be prepared to discuss non-financial objectives relating to family life and security;
- It’s important to understand what is unique about them.
- Understand their end goals and aspirations;
- Share different options your female client can consider and compare;
- Spend time building rapport and gaining trust.
Why women are good for business
Gender diversity isn’t only about political correctness. It’s about making sure you can access the very best expertise and skills, and to do that you need variety amongst your personnel.
Morgan Stanley research has shown that diverse teams not only perform better but also use their financial resources to drive social change.
Barron’s has shown that having women significantly represented on boards generates higher returns on equity and invested capital, higher margins, a greater gender balance across the company, and it also lowers risk.
Only 20% of senior positions in the finance industry are held by women. Although this is slowly changing, there is still a long way to go.
When women get financial advice, they often like to work with a female financial adviser, because many women report that they find those working in the financial sector to be rather patronising, which does not encourage them to talk about money freely and take charge of their money.
In the meantime, women are being advised and serviced by an industry that is both run by and targeted towards, men. This is one of the biggest blocks hindering women who want to charge of their financial destiny.
In short, bringing women on board and fully utilising their skills is brilliant for business.
Investing in women
Investing in women and women-led companies is a hot topic right now. The 2017 Forbes Rich List had a record number of female self-made billionaires, and the IMF is adamant that investment in women’s health and education pays huge dividends in terms of economic development.
Here are some options to consider:
- Invest in a fund for female-founded start-ups. The AllBright EIS Fund, for example, has invested in everything from AI to organic baby food, fintech to medical diagnostics;
- Become a member of Investing Women Angels to learn about how to be an intelligent angel investor, to find new investment opportunities, and to support female entrepreneurs;
- Give a loan to a female entrepreneur in the developing world through organisations such as Kiva. Invest in her business and know that you are helping her family and community as well.
The attraction of ESG investing
ESG investing refers to investing in the environment, society, and governance: three things which collectively have a huge impact on the world in which we live.
Female clients and millennials are far more likely to invest in ESG products than their older, male counterparts. They are interested not only in getting a financial return but in doing good as well.
When you are designing and marketing your financial services products to female clients, remember that both financial and ESG objectives are important influencing factors.
Today just one in 20 independent financial advisers are women, so the industry is missing out on a great deal of expertise. At the same time is reinforcing damaging stereotypes about it being a man’s world.
What do you think can done to increase diversity in the financial sector to broaden the appeal of financial products and engage more female clients and colleagues? We’d love to hear your ideas.