A new study has found that financial services firms and financial advisors are leaving billions of dollars in revenues on the table by not making the investment world more accommodating to women.
A new study published last month by Bonn, Germany-based Simon-Kucher & Partners laid out how much the disparity in service between male and female investors has been costing advisors.
The study, entitled “Wealth Management: Building a Winning Client Experience for Women,” found that women’s wealth is growing at a significant pace. Specifically, between 2016 and 2021, women saw their wealth grow 180% faster than men. However, women are investing 22% less of their wealth in financial instruments than men.
“Men are still ahead,” said Leonie Kriett, director at Simon-Kucher. “But [women's] growth is much faster than it is of men.”
A primary reason for this growth are the efforts being made in the U.S. and Canada to bridge the so-called wage gap between men and women, according to the study. In addition, Kriett said there are more women in the finance world and they are becoming business owners.
The study reported that women in the U.S. between 25 and 34 earned 93 cents for every dollar a man did in 2020. This is up significantly from the numbers in 1980, when women made 67 cents for every dollar men earned, the study said.
The study also found that had advisors and financial services firms engaged women with suitable financial services investments, they could has easily brought in up to $14 billion in fees in just 2021 alone.
The firm conducted the study by soliciting 951 online responses from both men and women in the U.S. and Canda. The participants had annual household incomes of more than $150,000 and a net worth of at least $150,000.
The study showed that advisors do not know how to effectively communicate with women and are also not offering the types of products that female investors are generally interested in.
“Women would prefer in-person advice,” said Simone Schuettel, director at Simon-Kucher. “They really value that personal relationship with their financial advisor.”
Specifically, 43% of the women surveyed prefer in-person consultations as opposed to 33% of men and 79% of women saw the value in those types of meetings compared to 64% of men. Women said that they would prefer it if there were more educational pieces such as webinars offered to them that spoke to their goals in financial planning, Schuettel said.