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Close the Wealth Gap: Engage Women Investors

We are looking at the state of women and wealth management as part of Women’s History Month.

Yelena Dobric
Yelena Dobric


Women are the primary breadwinners in nearly half of U.S. households and they control half of the wealth in the United States. And with the upcoming generational wealth transfer, women are poised to control even more money and assets.

Recent research reveals that many women feel excluded from the financial services industry – to the detriment of women and banks alike. Only 26 percent of American women invest in the stock market (S&P Global). And only seven percent of the investing partners at the top 100 venture firms are women (Crunchbase).

Sallie Krawcheck, the CEO and founder of Ellevest and former CEO of Merrill Lynch’s wealth management division, said financial services firms are leaving at least $700 billion in revenue on the table each year by not meeting the needs of female customers.

Money that’s not invested does not grow, and over a period of time, loses value due to inflation. On the other hand, men’s investments are growing. This contributes to women’s retirement account balances being a third lower than men’s overall (Prudential).

Lack of investments or retirement savings plus the gender pay gap create a phenomenon known as the wealth gap.

The wealth gap is a lose-lose situation – for women and for the wealth management industry. By helping to close the wealth gap, wealth managers and financial advisers will prosper with their female clients.

However, in order to serve women successfully, the financial industry needs to understand this problem’s underlying causes.


It starts early, and lasts a lifetime conducted a survey of 1,000 parents that found people were more likely to teach their daughters fiscal restraint and sons wealth building. Later in life, women were likely to tell Prudential researchers they didn’t have time to learn about financial products, industry jargon or investment management. Most didn’t even think they had enough money to invest.

Seventy percent of financial advisers are male (Data USA). A survey by the Center for Talent Innovation found that sixty-seven percent of women feel misunderstood by their financial advisers, and believe they are not interested in their values or aspirations. A Prudential survey found that a quarter of women would leave their financial adviser if they were widowed or divorced.


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Women’s financial needs are different

Women need to save more money, sooner in life: According to U.S. Bureau of Labor Statistics women’s earnings peak sooner (around the age of 39), and then begin to decline, while men’s earnings climb until sixty, which means women need to amass most of their assets sooner than men.


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Women earn less money overall: Due to the gender pay gap, women need to set a higher percentage of their earnings for retirement.

Women live longer: To accommodate longer lifespans, retirement savings for women need to last on average six to eight years longer than those of a man.

Women take career breaks: Another challenge is that women take twice as many career breaks to care for children, parents or other family members.


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So, women need financial strategies and products to recognize these realities.


Establishing trust first

To establish trust, financial institutions must educate and provide opportunities for women to test the waters.


The COVID-19 pandemic caused many people to embrace remote learning and increased the need for higher-quality, widely accessible digital resources.

Online classes are an option, although women can sometimes have a hard time making real-time classes due to childcare, which can result in interruptions and unplanned emergencies. Pre-recorded lessons to be consumed at one’s leisure provide an alternative.

Then there’s a third option, enabled by emerging technology – conversational interface.

Nearly half of Americans own a digital assistant. Education can be provided through Google Home Actions, Alexa Skills or a stand-alone, bespoke chatbot. All can speak and answer questions. According to a PIMCO study, one in five women would actually prefer speaking to a robo-adviser than a human.

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Testing the waters

The COVID-19 pandemic has had a devastating impact on hundreds of thousands of lives. In the United States, millions of people have lost their jobs. How and when we recover remains to be seen.

Those lucky enough to have good health and employment may wonder what to do with the money they saved while confined to their homes. Some are asking their financial advisers, while others contemplate hiring one. In this sense, the pandemic removed at least one reason women do not invest – not having, or thinking they don’t have, enough money.

There’s also the issue of creating an inclusive environment.

As of 2020, 41 percent of video game players in the U.S. were females (Statista). The average age was 34. Going against stereotype, adult women account for a greater portion of the video game-playing population than boys under 18 (ESA). But this rise in female players is not reflected in finance-related games.

A search for “investing game” in the App Store returns eight results. These games simulate real-life investing scenarios. It is worth noting that all the games show male characters, and most are focused on competing against other players.

There’s room for games with a more traditionally female sensibility. They could feature female characters and focus on cooperation over competition and navigating life events. Women are usually more likely to want to join forces and ask for advice (Prudential). And outside events are likely to disrupt women’s lives in part because 75 percent of all caregivers are female (Family Caregiver Alliance).

All of these factors could influence the content of mobile games. When confronted with “what if” scenarios – whether submitted by the user or generated through artificial intelligence based on their data – the app could suggest actions for the player. Here are a few examples:

  • 1 Gradeschool
    2 Wedding
    3 house
    4 Pregnancy

In any case, the goal of these apps and games, would be to get the ball rolling, to break the inertia, to get women to engage with their finances and make their money work for them. In other words: to invest.


“The goal of these apps and games would be to get the ball rolling, to break the inertia, to get women to engage with their finances and make their money work for them. In other words, to invest.”
Yelena Dobric, User Experience Lead, Publicis Sapient
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Women outperform men in investing

A study from Fidelity demonstrates how and why women generally surpass men when they do invest.

STUDYING: On average, women study and observe more, before making investments and trades. They ask to see the data behind recommendations.

WAITING: Women tend to have patience. They buy and hold. They trade less. Women invest to enable themselves to navigate life events, with minimum disruption. Men were more likely to invest to beat the market.

DISCERNING: Women often focus on long-term goals. Eventually, their investments outperform men’s, partly because they pay less on trading fees.


Learn from existing leaders in women’s wealth management space

In the United States, Wall Street veteran Krawcheck founded and led Ellevest, the most famous financial advisory for women. They have adapted their products, algorithms and strategies to women’s unique needs.

In the United Kingdom, the founder of Netwealth is famous for championing female investors and their needs. Fifty percent of their clients are women – double the industry average for the U.K. (The Financial Times.)


How they do it

Start with life events: Financial advisers can build relationships with female clients by helping them prepare for important life events.

Emphasize goal-based investing: Advisers can help clients reach important life goals rather than just making as much money as possible.

Explain the numbers and the logic behind your approach: Therese Huston, a cognitive scientist at Seattle University, told Forbes that research studies show women to be just as – if not more – data-driven as men. In a sample of 32 studies, she said, 12 found that women were more likely to adopt an analytical approach, whereas the others showed no difference.

Utilize technology: Bots and automation can handle large chunks of wealth and personal finance management’s more tedious aspects, such as onboarding and asset transfer. Filling out forms by having a conversation is a more pleasant user experience than typing answers in tiny boxes in online forms on a computer. Similarly, straight through processing (STP) should handle low-to-medium level asset transfers.

As Publicis Sapient’s SVP Partner Tom Cramer said, “Let machines do what machines do best, and let humans do what humans do best.” Cramer’s innovative “Do It With Me” approach to wealth management is well aligned with what women want in a financial adviser: a partner.

Deliver the right message: Positioning yourself properly matters. In order to achieve that, you have to know your client. Customer Data Platforms (CDPs) can help firms know when and how to engage potential clients.

Hire more women financial advisers: A study from the Insurance Retirement Institute found that 70 percent of women seeking a financial adviser would prefer to work with another woman. Although female advisers leave the wealth management industry in droves mid-career, recent digital disruption has made it possible to advise remotely – so women can balance work and childcare.

Help women visualize their older selves: Prudential reports that the number one reason why women do not save more for retirement is trouble imagining a long life. Here’s how Kiplinger Magazine’s utilized imagery effectively, to help women visualize their older selves:

Kiplingers cover

Provide data behind your philanthropy offering: Women’s tendency towards data, in decision making, extends to philanthropy too. Only, they started asking questions in recent years (The New York Times).

Women no longer want to just pick a charity, and decide on the amount they are comfortable with. They want to know exactly what their money is helping achieve, and how. And if there isn’t an organization that’s supporting their cause already – they start one. Women today also know that when groups get big enough they make their voices heard, in the social and political arena, as well. In addition, women today are more deliberate and explicit in choosing to support women’s causes.

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The industry can help too

Companies that want to help close the wealth gap can do the following:

  • Establish deep understanding of women’s unique needs and challenges. Women invest to reach certain goals, not to beat the market.
  • Adapt strategies to best assist female clients.
  • Earn the trust of female investors, and position them for growth, as female wealth and influence expands.

Let’s close the wealth gap, together.

Want more insights?

Yelena Dobric
Yelena Dobric
UX Lead Financial Services

Where Tradition Meets Tomorrow

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