Financial services firms in the United States are failing to foster relationships with women, missing out on an estimated $782 billion in investable assets as a result.
According to Kantar’s Winning Over Women study, the financial services industry is falling short when it comes to understanding women in the workforce. There’s been a failure to recognize and respond to the growing number of female business owners and the high number of women serving in senior management roles at companies. This has resulted in American financial services firms underestimating the significant assets women control and the fact that they are the primary source of income in many household.
Kantar’s study looked at the motivations of women when considering financial planning and management and revealed key insights into their needs.
While more women are realizing the dream of financial success, fewer women than men are financially confident, with only 23% being highly confident, compared to 37% of men, and 47% expressing low confidence.
For women, finances are inextricably tied to families and home life and reflect who they are as people. As a result, women are less tolerant of risk than men. When investing, nearly twice as many women as men said they would not be willing to take any financial risk, but understand that in doing so they may not make any financial gain. 40% of women said they were not comfortable with their household’s current amount of debt, compared to 30% of men who said the same.
Despite being less satisfied with banks than men, women are more likely to be loyal customers, primarily because most are too time-starved to make a change. When it comes to long-term borrowing, women’s confidence and engagement begins to lag compared to men.
Despite gaining control of money, investing is still considered to be a “man’s world.” Lower engagement by women with investing is driven by feeling less informed. While women know investment education is needed, they cite lack of time and energy to learn all they feel they need to know.
- Only about 35% of women say they try to keep in touch with financial developments, compared to nearly 50% of men.
- Less than 30% say they look at financial websites for information, compared to 40% of men, and less than 30% say they usually speak to a financial advisor, compared to nearly 40% of men.
A combination of a pay gap, lack of engagement and financial education leads to a significant gap in investable assets among men and women. Women on average have about $156,000, compared to more than $200,000 for men. As a result, women feel less positive about their financial future than a range of other factors; are less likely to feel in control of their financial future (65% to 70% for men) and are less likely to feel like they know what steps to take (60% to 68% for men). Because of this, women find it even more important to work with financial providers they trust. But financial planners are not helping this dynamic, defaulting to tactics geared toward men, rather than women – only 61% of women say their financial services provider meets their needs very well.To begin to break this paradigm, Kantar believes financial services institutions need to better engage and empower women.
“Winning over women requires very different approaches to them throughout their financial lives,” says Anita Watkins, Global Head of Qualitative, Kantar. “Our research shows that financial institutions need to build trust and invite women to engage. They need to involve women as customers and not confuse confidence with competence. And most importantly, they need to empower women, not diminish them. Banks and advisers need to get to know their female customer as a person. Step into her world, listen and reflect what you hear.”
Winning Over Women is based on interviews with 2,500 men and women; interviews with executives at financial services firms and focus groups with women at varying levels of confidence in personal finance, all conducted in October and November 2018. The report also utilizes analysis of Kantar owned data assets.