Advisers must shift their attention to the huge opportunity of wealth controlled by women – many of whom require tailored financial advice, according to panellists on Investment Week’s latest Diversity Debates series
With only one in five women currently holding an investment product, and a staggering 52% of women having never owned an investment product at all in a recent YouGov Omnibus survey, advisers have at their fingertips a potential £350bn financial advice opportunity to seize. However, there is a significant need for innovation if advisers are to successfully target this segment of the market.
Talking about this "phenomenal opportunity" for advisers on the latest Diversity Debates panel, hosted by Investment Week, EY associate partner David Holton commented that whilst there are many products available in the market, few are tailored to any specific or niche part of the population or market, and in particular women continue to be missed out.
"There is a need for product innovation in the market today…[And] the industry needs to be cognisant of particular demographics and the culture as well…how do we as an industry transcend the cultural norm and make investing mainstream and interesting? We need to do some better storytelling about investing and returns and make it real and tangible."
Kathryn Pinner, head of UK marketing at AberdeenStandard Investments agreed, stating a more holistic approach was needed in the market when it comes to targeting women investors in particular.
"One of the issues is that some women do not know what investing is or that they are already investing. Our research asked participants if they were an investor and no one put their hands up. We then asked if they invested in a pension and all of their hands went up. Well that means you are an investor. Yet there isn't that understanding in some circles of what that means."
Pinner added that many women continue to struggle with the thought of paying for a financial advice which needed to be addressed by the industry: "If your boiler is broken, you go to an expert and pay them to fix it. There is a long term benefit of going to a professional. It is the same thing with a financial adviser. They provide a benefit and help you reap long-term benefits from your investments. We need to make sure [women] have that understanding of the long term and that reach."
The Wisdom Council's Anna Lane believes the finance sector's inherent lack of diversification must first be addressed in order to get more women to invest. The Wisdom Council, along with AberdeenStandard Investments, EY, HSBC Global Asset Management UK, Royal London Group, Scottish Widows, St. James's Place and Vitality worked together with over 3,300 women around the country in 2019 for the ‘Yes She Can' research report. The project aimed to tackle the challenge of making the proposition of long-term savings, investments and pensions more engaging and relevant for women. But overall the research found the finance industry isn't just speaking the wrong language for women, it is often having completely the wrong conversation which results in many communications falling on deaf ears and having no impact.
"To address the gender pensions gap and raise awareness, we need to make it part of all of our networks and conversations. This is a big challenge and one that is not possible for one firm to do alone," she said. "It needs the wisdom of the crowds and diverse minds working together, so the industry and society will benefit. Collaboration is very much the zeitgeist."
HSBC Global Asset Management's Smera Ashraf agreed: "The value chain is so long and there are so many important parts and that is why it is so important that as an industry we work together. We need for us to all to come together to start with the client, to understand what the client needs.
Holton added: "The industry is already starting to do this; and is asking how do I think differently about what consumers want? That is about product design. But actually the step before that is how do you get on the radar of investors, and make the story relevant to them? And that is the bit no one has cracked."
To watch the full Diversity Debates video series on women in investment, click here: