The private banking industry has an image of being severely male dominated. Its exclusion of women from important conversations is not only dated but also potentially dangerous. On the client front, there has been a steady rise of female millionaires in recent years. John Schaffer looks at the myths surrounding servicing female clients and how private banks can do better


According to statistics from Harvard Business Review, women will own 50% of the world’s wealth by 2020. The worrying statistic, however, for private banks is that 65% of female investors switch wealth managers because of unhappiness with the service, according to Boston Consulting Group’s (BCG) 2016 Global Wealth report.

Anna Zakrzewski, partner and managing director at BCG, tells PBI:

“Only 2% of Wealth Managers in our 2016 Global Benchmarking Survey even considered women as a distinct client segment. There may be wealth managers serving women well, but they are not doing so systematically.

“Many banks will host a female-focused event once in a while, but that's as far as most will go. While some examples are quite creative (such as a perfume workshop), banks need to be careful not to come across as patronising, reinforcing gender stereotypes.”

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Wealth managers continue to be scrutinised for the gender inequality existent within the organisations, with a common question being ‘where are the women in wealth management?’. However, with the female wealthy client attrition rate being so high on the other end of the spectrum, some private banks are taking action by putting in place female focused initiatives.

Swiss bank UBS unveiled in January a five-year initiative that focuses on women. Mara Harvey, head of UBS Unique and head of UHNW Germany, Austria, Italy, tells PBI that the initiative’s aim is a complete cultural shift.

"It’s not merely a segment-driven approach. It’s about how we make the entire value chain of the financial industry truly gender bilingual so that a female perspective is embedded into anything and everything we do."


Myth: Women prefer to work with female advisors

Olga Miler, managing director at UBS Wealth Management, tells PBI that women have no preference in terms of the gender of their advisor:

“It doesn’t really matter, what matters to women is that the advisor is competent, that the advisor can explain the decisions and the information in a precise and non-jargon based way, that the advisor is transparent and relatable on a personal and professional level.”

Harvey adds: “That competence has multiple dimensions. For a man, often, it translates as – the advisor has to know what they’re doing and present the best investment opportunities. For a women, competence is first and foremost emotional intelligence, and the technical competence is taken as a given.”


Myth: Women are risk averse

Harvey, UBS, suggests that there are some differences between the way men and women approach investments but that women are not risk averse:

“I don't like the generalisation that hints to women having a lower risk tolerance than men. Generically they don’t have a lower risk tolerance. I think women have a different way of assessing what their risks are in relation to the factors they consider to be particularly important.”

Sofia Merlo, Co-CEO at BNP Paribas Wealth management, tells PBI:

“Investment preferences between women and men are similar – with a slight preference for responsible investment by women. However, men and women have different motivations regarding their business. Women engage to achieve positive results in their business and to have an impact on society as a whole. Men are mainly driven by more competitive factors, wishing to be more successful than their peers.”

Harvey adds: “Women have different circumstances to take into account when they invest. The fact that their life span is likely to be longer implies that they have to plan liquidity flows with a broader time horizon.

“They also have to plan for the fact that there could be discontinuity in their earning streams, due to maternity leave.”

According to Merlo, women entrepreneurs are less likely to look for investment when starting and developing their business. “Furthermore, women entrepreneurs shy away from IPOs and rarely rely on raising equity,” she says.

A key issue is that private banks tend to treat female clients as a ‘category’. Veena Khanna director, wealth advisory services at US-headquartered Key Bank, tells PBI:

“Women have been typecast for way too long because they’re all lumped into one category. The thing that we as advisors have to do is begin to further segment them to ensure that we remove that service bias from the equation. We have to understand not only how they generated the wealth – whether it was inheritance, they’re widowed, they’re professionals, because all that plays into their goals and the recommendations we provide.”


Myth: Women lack financial literacy

Harvey, UBS, says that as far as confidence goes, a lot of research points to the fact that while women are not less knowledgeable “they do need more information to feel fully confident and happy with the decisions they're taking”.

Merlo, BNP Paribas says that amongst entrepreneurial clients, women are leading the way: “In terms of the pathway to success, given the historic barriers to business ownership, our latest Global Entrepreneur Report on elite entrepreneurs shows that women are more likely than men to be first generation success stories. Nearly a third has no family history (compared to male entrepreneurs at 28%). Their common goal is to combine achieving positive outcomes for their business and change society but two thirds of women entrepreneurs feel the challenges they face are greater than those faced by men.

“These leading women entrepreneurs are aware of the legacy they want to lay down for future entrepreneurs – either female or male. The report concluded that the 1,000 interviewed women entrepreneurs were more successful than their male counterparts – higher revenue, higher number of companies, and higher personal wealth.”

Harvey highlights the key failure of the industry to appropriately service female clients’ needs:

”In the past we did not do a good enough job of approaching women as individuals in their own right. Too often we considered them as partners of a gentleman who is the wealth creator.

“That is an obsolete way, because regardless of whether these women do have spouses who might be wealth creators, they in their own right have their own businesses, initiatives, sense of purpose for their wealth and for what they want to do with it.”