Just how are women’s daily lives different from those of most men? And how do these differences affect women’s financial needs? The obvious truth is that many women, in addition to holding down highly demanding jobs, are the primary caregivers to children and often to aging parents. They are household organizers and cleaners. They are food shoppers, menu planners, and cooks. They tidy up the kitchen and feed the pets. That old adage—men work from sun to sun, but women’s work is never done—has perhaps never been truer. Indeed, the juggling act that so many women confront—too many tasks and too little time—has brought about the need for products and services that both address women’s distinct financial circumstances and treat them as professional equals to their male counterparts.
Yet women continually feel exasperated by the way financial companies serve them. Our survey respondents had quite a few scathing things to say, reporting that they have often experienced disrespect, condescension, poor advice, contradictory policies, and a seemingly endless obstacle course of red tape and one-size-fits-all forms that have left them annoyed and exhausted. While men can obviously become frustrated by poor service as well, the women in our survey believed that their gender was a key factor in the way they were treated.
Here are some of the comments from our interviewees:
“First and foremost, many financial planners talk down to me. I ask a lot of questions because I want to understand their investment strategies.”
—Janice, 46, upper-middle class, married with children
“I hate being stereotyped because of my gender and age, and I don’t appreciate being talked to like an infant.”
—Mariana, 28, middle class, single
“I would change how many financial service reps talk down to women as if we cannot understand more than just the basics when it comes to financial discussions. Being in the financial industry myself, I find these attitudes highly insulting.”
—Karen, 51, upper-middle class, married with grown children
“As a single woman, I often feel that financial services institutions aren’t looking for my business. They want people who are preparing for kids. While I’d love to have kids, I don’t want another reminder that kids aren’t in my near-term future.”
—Liz, 29, upper-middle class, single
“Advisors are almost afraid to let the woman make the decision. They tend to defer to the male, no matter who is asking the questions or doing the investing.”
—Cecilia, 61, lower-middle class, married with grown children
What exactly do women want from financial services providers that they are not getting now? They want recognition from the industry that women view money and wealth differently from men. By and large, women do not seek to accumulate money for its own sake but view it as a way to care for themselves and their families, improve their lives, and—most important—ensure security. They do not need financial products and services that offer access to complex money-manipulation methods. They want advisors who understand their need for short-term simplicity and long-term stability. They want solutions that help them with their most frustrating task: managing the household finances from day to day and month to month.
Our survey has helped us identify four service categories that financial firms can focus on in order to capture more of women’s business:
Household Administration. Help women keep track of family finances easily and securely, and enable them to save time spent in making calculations, writing checks, and mailing payments.
Financial Education. Present opportunities for women to learn more about budgeting, saving, and long-term financial planning.
Financial Advice. Provide financial advisors who truly understand women’s needs, can help women with financial planning, and treat women as equals and with respect.
Children’s Solutions. Offer ways to effectively protect children during financial troubles—for example, by giving children access to funds in emergencies and by teaching them about finances.
Moreover, our survey indicates that there are certain times in women’s lives when they are most in need of financial help. For a majority of women, these times include opening a first bank account, obtaining a first credit card, accepting a first job, getting married, buying a home, starting a family, receiving a job promotion, getting divorced, or becoming widowed. For a smaller number of women, there are important “liquidity events,” such as selling a business or coming into an inheritance, that also put them in the market for new or better financial advice.
While it’s true that men face similar milestones, our survey respondents clearly feel that they are taken less seriously than men and that financial institutions are largely insensitive to how the differences in women’s lifestyles affect their banking, investment, and insurance needs at critical inflection points in their lives. In our view, if you can successfully serve a woman while she is “on the rise”—increasing her wealth or making an important investment decision—she will probably remain a loyal customer as she moves into higher income brackets. Even if her income and net worth do not rise substantially, she is likely to remain a loyal, profitable customer of the company that helped her through a significant event.
Our survey also revealed that women’s attitudes and behavior toward money and money management change with age and wealth. Younger women tend to keep most of their money in traditional bank accounts. Women with relatively little money have a very high level of dissatisfaction with all financial services. Women under the age of 50 are likely to prefer to do their banking online whenever possible—primarily because they feel that their financial advisors don’t understand their needs and that it takes too much time to get the service and information they require.
Perhaps the greatest opportunity for improvement is in financial advice and investment services for affluent women. For example, older women who are “managing on their own”—living without a partner—typically shift their wealth from stocks and bank accounts into retirement plans and real estate as they age. They have more wealth than women in other segments and more time to manage it. Yet many of them feel that investment advisors treat them poorly, do not understand women’s needs, and do not have women’s best interests in mind. These women say that they want better information sources and educational materials to help them make decisions. Like many men, they also feel that rates and fees are often unreasonable and are sometimes hidden or unclear.
A key group is well-educated, highly affluent women with a net worth of between $500,000 and $1 million. A significant amount of this segment’s wealth—an average of 20 percent—is often in checking or savings accounts. These women know that they could and should do more with their money but have not found a way that feels right for them. They say that the financial advisors they have worked with are not proactive enough, do not provide sufficient information about processes, and generally assume that clients do not want to pay higher fees for greater access to information and their advisor’s time. Our research shows that these assumptions are incorrect. Women want to have more engagement with their advisors, would rather spend real time with them than do research online by themselves, and are quite willing to trade up for an advisor to whom they can delegate important investment decisions.