My Dear Friends,

For generations, the world of finance has been predominantly male-dominated, even though the number of women in leadership roles and as significant wealth holders is steadily increasing across various sectors. Yet, the financial industry has lagged behind in evolving. Women remain the most significantly overlooked demographic in financial services.

Have you ever pondered when the financial sector will finally prioritize the essential changes needed to ensure women feel comfortable and empowered, rather than anxious, about their financial affairs?

About HNW Woman

Women currently hold 32% of global wealth, a figure projected to surge to $92 trillion by 2024 with an annual growth rate of 5.7%. In the coming decades, women are poised to be the primary recipients of wealth passed down through generations. In the high-net-worth (HNW) segment, women account for 40%. Despite this, the financial industry struggles to resonate with female clients, from marketing and advisory services to the products it offers.

While women are proficient savers, studies indicate they tend to be overly cautious in making decisions that could enhance their financial autonomy. Only 27% of women who own wealth consider themselves active investors. Even the savvy business owners or those who are excellent at managing household finances. 59% delegate long-term financial planning to their spouses. This overlooks the potential risks of divorce or outliving their partners, leading to financial hardships.

Despite a narrowing gender wealth gap, women have 40% less capital later in life than men. The Investors Watch Report shows that 82% of women feel men know more about investing, underestimating their financial skills. This confidence gap stems more from the financial industry’s inadequate representation of women than from their willingness to seek help.

The financial sector must evolve better to serve the growing number of female wealth owners. It needs to prioritize gender equality, purpose, and empowerment. Success depends on women asserting control over their financial futures.

Financial Inclusion

The European Investment Bank reveals gender diversity in finance could raise global GDP by 26% and human capital wealth by $160 trillion. Christine Lagarde, President of the ECB, states empowering women financially boosts fairness, diversity, and global economic growth. Women hold substantial wealth, which is crucial for economic vibrancy and resilience. In the Middle East, women manage $800 billion, 13% of the region’s wealth. UK female entrepreneurs have $349 billion in untapped potential. In Asia, 24% of wealthy women are entrepreneurs, surpassing many male counterparts. Yet, measuring female wealth accurately remains challenging, especially where household members count assets.

Call To Action

The message is unmistakable: women should be urged from youth to evolve from savers to decision-makers, planners, and investors for future security. Considering women’s longer life expectancy, planning for extended years is crucial, not optional. To reach this aim, we need major changes in politics, economics, and education, such as adding financial literacy to school curricula.

Wealth for women is a means to a number of ends and it is not the end itself. Women are therefore more likely to plan in life stages and key events
_{Anna Zakrewski, Partner and Managing Diretor , BCG}

The most crucial transformation must originate within the financial industry, historically tailored to men. It demands deep changes in attitudes, policies, and services to meet female clients’ needs truly. Elevating women to leadership positions is vital for offering role models and reforming how the industry communicates with women, ensuring inclusivity, respect, and motivation.

The industry needs to tackle women’s excessive cash holdings, a sign of saving skill but risky as the lowest-performing asset class. Promoting investment among women is crucial for turning savings into lasting wealth, a significant move towards financial empowerment and equality.

The Invisible Women

In her pivotal work “Invisible Women,” Caroline Criado-Perez unveils the profound impacts of the gender data gap. She illustrates how the reliance on predominantly male-centric data in fields ranging from healthcare to finance systematically sidelines women’s needs, leading to dire consequences for their well-being. This oversight has rendered the financial sector particularly discriminatory, failing to address or serve women effectively.

The narrative shifts as Criado-Perez points to the remarkable resilience and leadership exhibited by female-led companies, countries, and institutions during the COVID-19 pandemic. She also highlights the leadership of three influential women at the helm of major global financial bodies: Ngozi Okonjo-Iweala at the World Trade Organization, Janet Yellen as the US Treasury Secretary, and Christine Lagarde leading the European Central Bank. Their success underscores the potential of female leadership in fostering resilience and strength.

However, the journey toward gender equity in the financial industry remains fraught with empty promises. Despite 68% of the industry committing to gender equality in leadership, a mere 25% have publicly shown any progress. Criado-Perez argues that the path forward requires a dual effort: women must bolster their financial confidence, and the industry must radically overhaul its narrative. It’s a call to action for the financial sector to move beyond mere talk and commit to tangible, gender-smart changes.

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Closed Networks

The scarcity of women in financial advisory roles has fostered a culture that is both insular and often fails to represent or serve women adequately. The Citywire Alpha Female 2020 report sheds light on this stark disparity. The truth is that a mere 11% of portfolio managers are women. Within the broader financial sector, only 20% of women attain executive positions. 23% find seats on boards. A scant 6% rise to the role of CEO. This imbalance hinders diversity and limits the industry’s ability to cater to a broader range of needs and perspectives.

The transformative power of female leadership in finance becomes strikingly evident when we look at the Middle East. The region has seen significant strides towards gender inclusion in financial services. A pioneering shift has occurred in Saudi Arabia, with all major banks embracing female leadership, either within their boardrooms or at the C-level. Many of these women are at the forefront of fintech innovations or are catalyzing industry disruption by focusing on services for previously underserved segments.

This movement towards gender inclusivity in the Middle East underscores a crucial lesson: when women are given leadership roles in finance, the impact extends far beyond individual organizations, influencing entire regions. It heralds a more inclusive, innovative, and equitable future for the financial industry, demonstrating the profound societal and economic benefits of embracing diversity at the highest levels of leadership.

“Crypted” Lingo

The language and narratives perpetuated by investors, finance professionals, and the media significantly hinder women from unleashing their full financial potential. This gender bias is so ingrained that women often face different questions from their advisors compared to men and receive markedly different advice on the same issues. This perpetuates a damaging cycle that exacerbates gender disparities.

The media compounds this problem by reinforcing stereotypes. A staggering 65% of articles in women’s magazines portray women as impulsive spenders in urgent need of advice on curbing their expenditure and adopting frugality. When it comes to financial planning, women are typically encouraged to save modestly, cut back on spending, and possibly start a side hustle. In stark contrast, 70% of financial advice articles targeting men champion bold investments and rapid wealth accumulation, framing these actions as hallmarks of masculinity. Themes of combat, strength, power, competition, and high performance pervade this content, further entrenching gender stereotypes.

This portrayal feeds into the misconception that women are inherently risk-averse. However, the concept of risk is far more complex and nuanced than these stereotypes suggest. While traditional views equate risk with physical or financial danger, women’s approach to risk-taking is often more multifaceted, considering social and ethical dimensions. For instance, women may be more inclined to take social risks or weigh the ethical implications of their decisions.

It’s time for the industry to rethink its outdated perceptions of risk, moving beyond one-dimensional definitions to embrace a broader, more inclusive understanding that reflects the diverse ways in which women perceive and engage with risk. This shift is crucial for empowering women to make informed, confident financial decisions that reflect their values, goals, and unique perspectives on risk.

Rising Trend

As women increasingly become key wealth holders, the fabric of societal and financial structures is beginning to shift. However, for this transformation to fully contribute to global economic recovery, female wealth owners must leverage their financial clout to become pivotal influencers.

Women are not risk-averse but tend to feel less comfortable trying out different investment opportunities and stick to what they understand and know. The gender lens will help women to experience a new asset class or new opportunities but this will require a more focused and differentiated approach by advisors.

The resilience of women, whether as caretakers, entrepreneurs, or leaders of nations, has been unmistakably demonstrated, especially in the face of the pandemic. Despite facing heightened pressures and escalating inequalities at home, women have showcased unparalleled resilience. They have sustained their families and kept their businesses thriving amid unprecedented challenges.

Women’s innate response to stress, favouring ‘tend and befriend’ strategies over ‘fight, flight, or freeze,’ highlights their propensity to protect, nurture, and build supportive networks during crises. This approach has proven advantageous not only for personal survival but also for business resilience. For example, 60% of female-founded businesses in the UK experienced minimal disruption during the pandemic. Moreover, an AllBright survey revealed that the pandemic inspired one in four women to start their own businesses. According to UBS, 69% of female business owners are optimistic about the future, compared to 55% of their male counterparts, which underlines women’s unique resilience and relational focus on entrepreneurship.

Bridge The gap

The call to action is clear: more women need to step into investor roles and bridge the gender investing gap. Now more than ever, women should be encouraged to enhance their financial literacy and confidence. It’s time for women to assert their investment preferences, shaping new trends around risk, purpose, resilience, legacy, and education..

To forge a more resilient and sustainable economic future, it is imperative that women take the helm in wealth management decisions. Embracing diversity of thought and fostering innovation in the global economy hinges on women’s active participation and leadership. Women’s wealth can set new priorities, recalibrate entrepreneurship, and empower the financial industry to revise its agenda. Women’s financial empowerment is not just a tool but a cornerstone for reforming the financial landscape, heralding a future where economic resilience and sustainability are at the forefront.

The Revolution

The rise of women as significant wealth holders is not just a shift; it’s a revolution in the making. By embracing their financial power, women have the potential to reshape the global economy, driving innovation, sustainability, and resilience. As women bridge the investing gap, enhance their financial literacy, and assert their priorities, they redefine what it means to be powerful influencers in the economic sphere. The future is not just female; it’s financially astute, resilient, and transformative. Let’s harness this momentum to create an economy that values diversity, equity, and the unique strengths women bring to the table.

Time To Take Action

Let’s be real—the wealth management industry was never designed with women in mind. It still talks in circles, throws around insider jargon, and assumes we’re either disinterested or incapable. Meanwhile, we hold 40% of HNW wealth and get handed outdated advice wrapped in clichés. No wonder so many women save diligently but invest hesitantly.

The good news? We don’t need permission to change the game. The more we own our financial intelligence, demand real conversations, and cut through the nonsense, the faster this industry will have to evolve. We’re not here to follow outdated rules—we need to be the change!