Perhaps not surprisingly, money managers and mutual funds barely rippled the waters when we asked the women what products and services they were interested in, largely because they were already using them so extensively (Exhibit 2). The top choice, private equity investment (38.5%), reflects the entrepreneurial spirit and confidence of a group that was well populated with business owners. They were also interested in a product with a lot of good buzz, funds of funds. And, in perhaps the biggest difference from their male counterparts, 29.1% wanted to know more about socially responsible investing.
Planned And Charitable Giving
As a group, the women we surveyed were already fairly active in terms of charitable and planned giving (Exhibit 3). Looking ahead, however, more than half of them were interested in planned giving, including private foundations, charitable trusts and donor-advised funds (Exhibit 4). As they get older, and not coincidentally, as they pay increasing attention to their tax picture and retirement, the twin utility of planned giving as a way to realize their values and reduce their taxes is understandable.
Other Options
We also asked them about a range of other financial options and services, and again found that there's a vast difference between what they're doing now and what they expect to do in the future. Given the age of the majority of the respondents, 45 to 54, it's not surprising that retirement has been a driving force to date (Exhibit 5).
Looking ahead, however, it's a very different picture (Exhibit 6). Retirement planning all but fades from view (4.4%), presumably because they're already well provided for in this department. Instead, tax management services soar to the top of the chart as they have to begin to manage and distribute the wealth they have earned. They were also interested in asset protection (54.1%) because of the threat of lawsuits from former spouses or employees. Further, they wanted to know more about the concentrated stock positions that were a byproduct of their business success.
What does all of this mean for financial advisors who work with, or want to work with, wealthy women? First, women of wealth are independent-minded, but nonetheless understand the importance of professional financial advice. Secondly, they want a relationship that puts a premium on values and listening skills rather than raw financial expertise. And lastly, they're interested in a specific menu of products and services-funds of funds, private equity investment, planned giving, and tax planning-so financial advisors should marshal their resources accordingly, and direct their energies toward understanding and promoting these options to prospective female clients.
Hannah Shaw Grove is managing director and chief marketing officer of Merrill Lynch Investment Managers. Russ Alan Prince is president of the consulting firm Prince & Associates.