I was out at dinner with a friend and her husband when they started squabbling about her financial adviser.
''I love her,'' said my friend, a successful six-figure earner, praising a new plan to balance her personal and financial priorities. ''She totally gets me.''
Her husband, equally successful, said the adviser didn't impress him much. With the market up about 30 percent in 2013, how could his wife's portfolio have returned only 10 percent? My friend said that her returns were fine, and, even more important, that the adviser understood her goals. Yes, her husband said, but goals require this thing called ''money.''
He wasn't wrong. But neither was she. In fact, their Mars-Venus-and-money moment was an uncanny echo of an issue that's bedeviling many financial companies: The data-driven approach of traditional firms is alienating many women. And the way that women prefer to deal with money — holistically, emotionally — can be baffling to the guys on
In case the issue sounds like a relic from the '70s, allow me to quash that thought. Scores of recent studies show that we're in the midst of a tectonic gender shift around money: It's big, slow-moving and ultimately a game-changer. Women have money now, real money: They earn a combined
Financial companies see this as a huge opportunity. As
That's the conundrum facing people in finance: They're dealing with a highly educated, sophisticated customer who doesn't always know her REITs from her R.O.I. (For those of either sex who aren't fluent in finance, that's real estate investment trusts and return on investment.)
And despite their growing affluence, women still lag men in crucial ways. A 2011 study by Vanguard found that the average retirement account balance for men was
So the answer is to market harder to women, right? Not exactly. Money has long been a traditionally male domain, sure, but historically so were medicine and law. No one really considered that gender differences might require different approaches to finance until a 2009 study of 12,000 women by the
I'll say. Dozens of studies, polls and white papers later, a more complex financial portrait of women emerged than many companies ever bargained for. Some of the results were puzzling. I remember one study by Prudential in 2010 that delivered this head-scratcher: 95 percent of women described themselves as financial decision-makers — yet over 80 percent said they needed some or a lot of help making money choices. Wow. What do you do with that?
Initially, there was a quiet conclusion in the industry that women needed some remedial help. No one said ''bad at math,'' but it was hanging in the air.
As the data rolled in, it became clear that women's approach to money simply didn't fit the existing molds. You could talk to guys about research, transactions, performance. Women were more interested in coaching, saving and support, according to extensive Ameriprise and Vanguard research. The good news is that, maybe, there's nothing wrong with just accepting that. In the last year or so, there has been a significant shift at many companies, driven by executives and advisers — many of them female — who believe that the ''women are missing something'' model is missing the point.
There is a push to view women's financial style as their strength, not their undoing. ''The reality,''
Women don't need feminine financial products. ''For the most part, women need the same portfolios and the same risk management,'' Ms.
Nearly 75 percent of women want to learn in a ''welcoming'' environment with other women, new data from Allianz Life shows. They would also like financial information in plain English so that it doesn't come across like instructions for assembling your own motherboard.
After all, there is newfound respect for the fact that an approach preferred by women — to evaluate financial choices carefully, avoid rash moves and ask a lot of questions — tends to be profitable over the long haul. And some of these big institutions are realizing that their own profits hinge on meeting women on their own terms.
Vanguard was host for a webinar in November, titled ''Women and Investing: Unique Situations, Practical Suggestions,'' that had 5,300 attendees, far more than the company attracted with other online efforts. Fidelity teamed up with LearnVest for two events last year that managed to combine celebrities like
Yes, I know that these companies stand to gain by investing in this ''new'' market. But I'd wager that the gains will be even greater for women.
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