WEALTH MANAGEMENT FORW OMEN - Accenture

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REINVENTINGWEALTH MANAGEMENTFOR WOMENTHE NEW FACEOF WEALTHMANAGEMENT

REINVENTING WEALTHMANAGEMENT FORWOMENFor much of the wealth management industry’shistory, advisement has been based on the preferencesof male investors.In the Baby Boomer era, financialadvice was often doled out on the golfcourse or in the men’s club, placeswomen were not frequenting. As aresult, the female half of the wealthequation was typically marginalized.advisory model to meet women’sneeds. Firms and advisors need tocreate deep value propositions thatresonate with women of all types ifthey want to remain relevantmoving forward.This can be hard to reconcile in today’sworld. In just a few decades, womenhave become a financial force withimpact. Given the increasing numberof women who now have careers, headcorporations, run their own household,and invest, firms now need to treatwomen as a key client category.And women are a market ripe forattention. According to our research,only about half (52 percent) of femalesfeel confident in their investing ability.And this research looked as well at thekey preferences of female investors.In the pages to follow, we will not onlydetail those, but provide you with thebeginnings of a road map to win withwomen in wealth management overthe long term.While many wealth managementfirms acknowledge this fact, few seemto have adequately changed their2 REINVENTING WEALTH MANAGEMENT FOR WOMENThe current advisorymodel is not workingfor women.According to our research, women aremore likely to use dedicated advisorsthan men, but are less likely to saythey are satisfied with their advisorsor find them trustworthy (63 percent).As a result, only 61 percent of womenreported having a good understandingof their investments and holdings. It isnot surprising then that only 41 percentof women say they could invest assuccessfully as a professional wealthadvisor.

USAGE, SATISFACTION &SELF-PERCEIVED ABILITIESINVESTMENT STYLE& TRUSTCONFIDENCE28% 34%54% 46%69% 63%65% 52%54% 41%Use adedicatedinvestorUse a hybridmodelTrust advisor tomake decisionson their behalfHaveconfidence inown investmentdecisionsBelieve they caninvest as well asa ATION63% 48%52% 35%78% 72%75% 61%84% 65%Talk to advisorsquarterly ormore about newinvesting ideasTalk to advisorsquarterly or moreabout retirementplanningAre satisfiedwith theservice fromadvisorHave a goodunderstandingof investmentsAre primarilyresponsible forthe investmentsin the householdFigure 1: Women vs. Men: Investing Profiles DifferSource: Accenture researchREINVENTING WEALTH MANAGEMENT FOR WOMEN 3

UNIQUEWOMEN’S NEEDS AREWhile generalizing an entire gender’s needs is tricky territory,it is safe to say that a majority of women show preferences thatdiffer from those we have traditionally seen in male investors.Whether women realize it or not, atsome point in their investment journeythey are likely to need advice on assetprotection, sandwich generationpressures, and the impact of lowerincome and career breaks.INVESTING STYLE. Women are moreconservative long-term investorsthan men. Their primary wealthgoals revolve around keeping moneysafe and saving for long-term goals,primarily retirement. Nearly half (48percent) of women in our research saythey want to preserve as much wealthas possible.DECISION MAKING. When given thechoice, women would rather use aself-directed investment portal wherethey have financial advisor access, butautonomy in decision making.FEE STRUCTURE. A majority of femaleinvestors (62 percent) prefer a paymentstructure that allows them to choosethe level of service provided, ratherthan a set structure where the investorpays a percentage of assets undermanagement.WEALTH TRANSFER. As Baby Boomerwomen outlive their spouses, they areproving more than willing to moveassets in different ways than they didwhen their spouse was driving financialdecisions.i Expect them to challengeadvice if a strong foundationalrelationship with their advisor doesnot already exist. Most make a switchwithin three years of a spouse’s death.iiCOMMUNICATION. Career-mindedwomen want a new breed of wealthmanagement—transparent, interactive,and with frequent touchpoints. Yet, wefound that only 35 percent talk withtheir advisors quarterly or more aboutretirement planning or to see if theirgoals are on track.4 REINVENTING WEALTH MANAGEMENT FOR WOMENUNDERSTANDING. Overall, womenwant advisors who understand their“life pictures” and “financial journeys”rather than just their investments—akey change from the traditional maleclient.

FEMALE INVESTORSNEED MORE SUPPORTBASED ON LIFE PICTURE,LESS PUSHING OFPRODUCTSWomen who invest look beyondproduct performance. Only 42 percentagree with the statement: “I only careabout performance, nothing elsematters.” They want an advisor whounderstands their life map and thegoals it entails.Yet, they are not engaging withadvisors on the big issues. Despitehigher usage, women do notcommunicate with their advisors orfirms as much as they need to in orderto support their goals. They have lessfrequent contact, mostly only annually,and not on critical topics like planningand wealth transfer.In short, women are not talking to theiradvisors often enough about the thingsthat matter to them.n Only 44 percent talk to their advisormore than once per yearn Only 48 percent talk to their advisorquarterly or more about newinvesting ideasn Only 35 percent talk to their advisorquarterly or more about retirementplanning or to see if their goals areon trackLeading with advice, rather thanpushing product portfolios, could helpaddress women’s desires to be betterunderstood by an advisor. Creatinggroups to address major life events,where women hear not just fromadvisors but from peers in the samesituation—divorce, widowhood, newlylaunched career—could help. Movingbeyond “Investing Lite” seminars toaddress the real questions and issueswomen face will help firms better knowtheir female clients, and thus betterserve them.With firms like Ellevest—an advisoryfirm created specifically for women’sneeds—gaining popularity, traditionalfirms need to play catch-up quicklyor they might risk client defection tomore specialized companies. SallieKrawcheck, Ellevest founder, explainedin an early 2017 interview: “At Ellevest,our ‘for women’ is not just a marketingangle. Instead, we calculate financialgoal targets based on women’sspecific characteristics, such as theirlonger lifespans for retirement (reallyimportant) and a salary that tends topeak sooner than men’s ”iii Establishedwealth management companieshave not generally dissected theirclient data using a lens for females—but disruptors like Ellevest are fastchanging that.44%Talk to their advisormore than onceper year48%Talk to their advisorquarterly or moreabout newinvesting ideas35%Talk to their advisorquarterly or moreabout retirementplanning or to seeif their goals areon trackREINVENTING WEALTH MANAGEMENT FOR WOMEN 5

FIRSTSTEPSTOWARD SERVINGFEMALE CLIENTS BETTERThe recent surge in female clientswas not unexpected, based on theincreasing number of women in theworkforce as well as those inheritingwealth, yet wealth management firmsstill seem unprepared for it. Mosthave not yet taken concrete steps toaccommodate women in their advisorymodels.While pivoting an advisory model is nosmall task, a few first steps could helpyou better welcome and serve yourfemale client base:CREATE DEEP, TAILORED VALUEPROPOSITIONS THAT RESONATEWITH WOMEN. Take into account thebasic needs expressed:n Improved education andcommunication, while allowing forautonomous decision makingn Wealth preservation for the long termn A more flexible fee structure,allowing for payments based uponlevel of service usedn Transparency in approach, withBUILD A NETWORK AROUNDSEVERAL KEY SEGMENTSINCLUDING SINGLEPROFESSIONALS, NEWLYDIVORCED/ WIDOWED, ANDENTREPRENEURS. Doing so preventsthe one-size-fits-all approach thattempts some firms to lump all womeninto the majority’s preferences. Ayoung, single professional and awoman the same age with threechildren but no career will have verydifferent life journeys—and theiradvisory network should reflect that.LEAD WITH ADVICE, RATHER THANA FLURRY OF INFORMATION ONPRODUCTS. Consider:n A hybrid advice approach—a robo-centric portfolio with frequent andpersonal access to an advisor tomaximize valuen Educational events to addresseverything from the basics ofinvesting to the latest trends andopportunities for women withvarying appetites for risk based ontheir life goalsfrequent touchpoints on life goals6 REINVENTING WEALTH MANAGEMENT FOR WOMENn Women’sforums based ondemographics or life goals—virtualor in-person—where clients canconnect and share challenges,tips and tricksFemale investors are here to stay,changing the wealth managementlandscape. The question is: Is your firmpaying attention? With an increasingportion of the world’s wealth in thehands of women, no firm can afford toput female clients on the back burner.The time to act decisively andinclusively is now. Half of your firm’sfuture client base awaits.

REINVENTINGREINVENTING WEALTHWEALTH MANAGEMENTMANAGEMENT FORFOR WOMENWOMEN 77

CONTACTSABOUT ACCENTUREKendra ThompsonAccenture is a leading global professional services company, providing a broadrange of services and solutions in strategy, consulting, digital, technology, andoperations. Combining unmatched experience and specialized skills acrossmore than 40 industries and all business functions—underpinned by the world’slargest delivery network—Accenture works at the intersection of business andtechnology to help clients improve their performance and create sustainablevalue for their stakeholders. With approximately 401,000 people serving clientsin more than 120 countries, Accenture drives innovation to improve the way theworld works and lives. Visit us at www.accenture.com/wealth.Managing Directorand Global LeadAccenture Wealth Managementkendra.thompson@accenture.comWith over 17 years of broker dealer andadvisory industry experience, Kendrais focused on wealth managementstrategy. Based in Toronto, she leadsAccenture Wealth Managementglobally.Edward BlomquistREFERENCESi http://www.soa.org/search.aspx?searchterm Women outlive men and spend more than 11 years on average as windowsResearch Leadii TURE/150719999/the-great-Accenture Wealth and AssetManagementiii ccenture.comEd leads the global research activitiesfor Accenture Wealth and AssetManagement within the capitalmarkets industry. He specializesin digital wealth management andfinancial advisory services, includingquantitative and qualitative research inthe US, Europe, and iskyou-ellevests-first-ad-175340/DEFINITION OF WEALTH TIERSInvestible assets, not including value of homeMass Market: 250k in investible assetsMass Affluent: 250k-650kEmerging Wealthy: 650k- 1.5mHigh Net Worth: 1.5m- 10mUltra High Net Worth: 10mDISCLAIMERCopyright 2017 AccentureAll rights reserved.Accenture, its logo, andHigh Performance Deliveredare trademarks of Accenture.This report has been prepared by and is distributed by Accenture. All data points in this paperare from the underlying study, unless otherwise noted. This document is for informationpurposes. No part of this document may be reproduced in any manner without the writtenpermission of Accenture. While we take precautions to ensure that the source and theinformation we base our judgments on are reliable, we do not represent that this informationis accurate or complete and it should not be relied upon as such. Opinions expressed hereinare subject to change without notice. This document is not intended to provide specificadvice on your circumstances. If you require advice or further details on any mattersreferred to, please contact your Accenture representative. This document makes descriptivereference to trademarks that may be owned by others. The use of such trademarks hereinis not an assertion of ownership of such trademarks by Accenture and is not intended torepresent or imply the existence of an association between Accenture and the lawful ownersof such trademarks.

Accenture Wealth Management kendra.thompson@accenture.com With over 17 years of broker dealer and advisory industry experience, Kendra is focused on wealth management strategy. Based in Toronto, she leads Accenture Wealth Management globally. Edward Blomquist Research Lead Accenture Wealth and Asset Management edward.a.blomquist@accenture.com

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