KUALA LUMPUR: Women in Asia are building and inheriting more wealth than ever before. According to Boston Consulting Group (BSG) 2010 report, the percentage of wealth controlled by women in Asia (ex Japan) is rising nearing 30 per cent annually and total wealth controlled by women reached US$914 billion in 2010.
Their heightened visibility in financial circles can be traced to more women achieving success in the workforce and a greater number of women actively managing family finances. Kim Sung-Joo recently made her debut on the inaugural Forbes list of Asia’s Power Businesswomen in celebration of International Women’s Day recently. She is the youngest daughter of an energy conglomerate tycoon in South Korea and created her wealth from luxury fashion.
The increasing number of wealthy women is also partly because they are inheriting wealth due to their longevity. Puan Sri Lee Kim Hua, 81, widow of the late casino magnate Tan Sri Lim Goh Tong, is one of the 40 richest Malaysians on the 2012 Forbes Asia list.
Without a doubt, Asian women are creating significant financial visibility. But are bankers and wealth advisers paying sufficient attention to this alluring segment of the market?
Women of wealth: Based on research conducted in 2011 by the Family Wealth Advisers Council, a network of US-based, independent fee-only wealth management firms, the financial services industry has a long way to go if it wishes to provide the kind of service wealthy women say they want. The title of the study of high net-worth American women says it all: “Women of Wealth: Why Does the Financial Services Industry Still Not Hear Them?”
Involving 551 women across the United States with a net worth of $1 million or more, the study collected survey questionnaire data across marital status, employment status, age and net worth. The research looked at what worries wealthy women:
About 86 per cent of working women surveyed consider obsolete careers and eroding earning power as risks to their financial success;
Married women believe health challenges present a greater risk to their financial security than the death of a spouse; About 96 per cent of women want their unique circumstances and their entire life picture understood by their financial adviser; About 80 per cent of women (either married or divorced) believe that they will be called on at some point to help one or more of their children in a crisis;
About 81 per cent of retirees see a potential decline in the economy as a major risk, versus 45 per cent of full-time working women; and
About 57 per cent of married women feel that divorce poses a significant risk to their financial well-being.
With women’s economic clout in the workplace and purchasing power in all consumer and commercial markets increasing, their dissatisfaction with the financial services industry is also growing. The study clearly showed that women do not like to be considered a monolithic group, but want services tailored to their specific circumstances. Evidence suggests that wealthy women in Asia Pacific are also having similar experiences.
Different women different needs: As more women call the shots on money, they also want their wealth advisers to do a better job of meeting their needs. They want the same attention, advice, terms and deals that men get with advisers who provide investment recommendations. But, at the same time, women want advisers to tailor services to them because they have very different needs and expectations than men.
In the BSG survey, women said advisers tend to assume they have a lower risk tolerance than men, so advisers provide only a narrow range of investment alternatives. Some women claimed that advisers for women are too quick to focus on strategies that don’t emphasise on performance, assuming that women are more inclined to make investment decisions based on social issues.
With these and other study insights, wealth advisers who service female clients should foremostly recognise that women want to be treated differently. Some suggestions come from the findings:
Women want to be understood as unique individuals. They want an adviser who listens to their needs and is trustworthy. A fiduciary adviser who knows how to create strategic investment allocations based on a women’s situation, goals and risk appetite will stand a better chance of securing their business.
Women are looking for advisers who can provide advance planning, relationship management and investment advice a one-stop boutique financial centre.
The wealth adviser’s gender plays an important part of the financial planning process for wealthy ladies. Female wealth advisers will be able to relate better to their situations and challenges than men.
Women’s investment attitude: It’s no surprise that women’s behaviour as earners, investors and savers is the subject of a large and growing body of behavioural economic research, which has yielded important findings. Women prefer to focus on long-term investment goals and seek holistic advice. When women invest, they tend to look for informed advice and better rate of return than men. Women can be too conservative in their approach, especially given the fact that they tend to live longer than men. Ultimately, from the way they seek financial information and advice, to their understanding of the long term, women’s financial behaviour holds crucial lessons for all financial advisers.
By arrangement with The Star/ANN