According to a BCG survey, 73 percent of women said they are "most dissatisfied" with the financial services industry. Women claim they are not respected, often treated in a condescending manner, receive poor or contradictory advice, and get worse terms and deals than men. One participant shared her frustrations saying, "I hate being stereotyped because of my gender and age, and I don't appreciate being talked to like an infant."
But banks and wealth managers beware -- you're ignoring women at your own peril. How so? The Federal Reserve reports that women control 51.3 percent of all wealth in the United States. By 2020 that number is projected to grow to two-thirds. A second BCG study showed that one in three high net worth individuals (those with assets over $250,000) are women. And their wealth will grow at 8 percent per year.
The female economy is one of the largest on earth. Women earn $13 trillion in earnings and control $20 trillion of consumer spending. That's three times the GDP of China! Furthermore, as more women become entrepreneurs (they start businesses at twice the national average), they will have yet more money to spend, leverage and invest. BCG claims that 20 percent of women's wealth is squirreled away in checking and savings accounts. Just think of what kind of additional fees and value-added a savvy banker could reap by actually paying attention to what women want in the way of financial services.
So what do they want? Women want:
• Help in managing household finances quickly and easily
• Education on budgeting, saving, financial planning
• Financial advice that's geared to their specific goals and stage in life
• Clear, honest, open and relevant communication regarding product and service offerings and how such offerings will benefit them personally
• A focus on long-term investment performance
• A relationship that's built on empathy, understanding and trust
Surprisingly, only 11 percent of women prefer to work with a female financial advisor; the majority (85 percent) said that they were indifferent to the gender of their banker. But more women in finance can only be a good thing. Several studies show that women take more prudent risks and achieve more consistent and higher yields on funds they manage.
What's a woman to do? While most financial services companies still focus on style over substance, there are a few that actually "get it." American Express caters to more affluent customers, and particularly women, who are in charge of 80 percent of household purchases. The company also has a program called OPEN that's targeted at women entrepreneurs. Wells Fargo's Women's Business Services program seeks to provide women with research, education, advice and resources to manage both their personal and business finances. In the Delaware Valley, Consumer Credit Counseling Services has a series of educational workshops called FinanciallyHers®. And the world's first bank created by women for women is in Germany: Frauenbank. The company's philosophy is to provide individualized advice based on quality, flexibility and transparency.
With examples like these, let's hope more financial services companies figure out the value of really focusing on what women want and need.
Cross-posted from Forbes.com