Women to Wall Street: Are You Listening?

12 juillet 2014

(Article offert en anglais seulement)  

IMAGINE that you work for a financial company. You’ve plowed through stacks of research showing that women — who are increasingly educated and affluent — could be a big source of revenue for you. Now what?

Do you paint the reception area a nice shade of coral? Put handbag hooks on the bathroom doors? Provide sensitivity training to your staff?

If you’re thinking that it can’t be that hard to bring female customers in the door, let me bring you up to speed: Women control trillions of dollars of wealth in the United States, yet as clients, they pose a challenge to Wall Street’s traditional way of doing business.

Every year at its national conference, for example, TD Ameritrade offers a seminar for advisers on working with women as clients, “and it’s always jam-packed,” said Kate Healy, managing director of marketing for TD Ameritrade Institutional. This session is attended mostly by men, “and they’re struggling,” she said. Some are thrown by women’s high question-asking quotient, she said; many male advisers wonder whether they should just stay out of the way and have women deal with women.

“I always say no,” Ms. Healy said. She cited research showing that women as clients don’t necessarily prefer to work with female advisers — any more than they want pink-themed websites.

Jane Newton, a partner at RegentAtlantic Capital in Morristown, N.J., put it this way, “Women don’t need different products or services.” Mutual funds and exchange-traded funds that work for men ought to be fine for women, too. The problem is something else, she says, “Advisers need a different way of communicating with women.”

Companies know this, yet there’s a frustrating lack of agreement about how to go about it. Companies like Merrill Lynch and Vanguard lean toward what I’ll call a more gender-agnostic approach, focusing more on a client’s individual situation. TD Ameritrade, Ameriprise, Barclays and Pax World Investments are among those that seem to be trying to embrace a financial style that is more overtly friendly to women. (Pax has announced an index fund made up of companies with a commitment to women’s leadership.)

Consider the first group. As Vanguard learned through a two-year study, many women prefer advisers to focus on life goals, and not just on mutual funds and other investments. But many men like that personalized touch, too, said Catherine Gordon, a principal in Vanguard’s investment strategy group. Rather than focus on gender, she said, “we’ve found it’s better to understand the particular investor.”

Likewise at Merrill Lynch, there’s a conviction that gender “can be a distraction in financial planning,” said Michael Liersch, head of behavioral finance at Merrill Lynch Wealth Management. To that end, the company is training advisers to use a proprietary tool called the Investor Personality Assessment to give advisers a more objective way to evaluate each client’s goals.

Vanguard and Merrill Lynch have seminars and other programs for women. But the overarching message to advisers is to focus on the individual sitting across from them. As Mr. Liersch put it: “Let’s forget about gender differences. Men and women aren’t all that different at the end of the day.”

I get that. It’s good client relations to consider each person’s needs. But many women are struggling to feel in control of their finances, given certain hurdles of their own. (Knowledge gaps + anxiety = shame.) Seventy-seven percent of women want to be involved in day-to-day investment decisions, a Merrill Lynch study found last fall, yet 72 percent say they “know less than the average investor” about investing in general.

EVEN the companies that take more specific approaches to women are still trying different strategies. In 2012, Pax World Investments announced a Women and Wealth program for advisers that helps them assess their businesses in terms of how well they’re reaching and keeping women as clients.

The same year at TD Ameritrade, the company hired Kathleen Burns Kingsbury, a psychologist and the author of “ How to Give Financial Advice to Couples” (McGraw-Hill), to create a training manual for advisers. The guide suggests ways that advisers can adjust their desk-side manner — for example, by making steady eye contact, encouraging questions and trying to take in the personal details that women bring to financial discussions.

I’m sympathetic to this approach. Money itself may be gender-neutral — we all swipe our credit cards the same way. But women often handle their finances in a way that’s remarkably different from men’s. We like to test the waters, gather opinions and (alas, poor Wall Street) discuss our feelings, lives and goals with our advisers. A great deal of research supports that conclusion, and a new study, "Harnessing the Power of the Purse", offers perhaps the strongest evidence to date that many women may have a distinct female financial style.

That study, a survey of 6,000 people in the United States, Britain China, India, Singapore and Hong Kong, suggests that women don’t necessarily lack moxie, skill or interest in money. But they’re often turned off by how money is handled in a mostly male world of finance.

Many women today prefer companies and advisers with “gender smarts,” said Andrea Turner Moffitt, a co-author with Sylvia Ann Hewlett of the study, which was published by the Center for Talent Innovation in New York. That means being able to field questions on virtually all aspects of a woman’s life, understanding how time-constrained most women feel, and not taking a one-size-fits-all-women approach to planning.

So what approach is best for women — and how can Wall Street accelerate its efforts to adjust to their needs? Finance has a long and hidebound history, and it may well be necessary to take a traditional approach to get the ball rolling faster.

“It’s a multifaceted challenge,” Ms. Turner Moffitt said. “And it will take creating the right training and incentive structures to shift advisers’ mind-sets and behavior.” In other words, how about giving advisers a bonus when they bring in more women as clients?

If coral-colored reception areas do the trick, great. But for the sake of creating financial parity at long last, I’m inclined to think there’s nothing like a carrot to get people moving.

Source: The New York Times - July 12, 2014