Financial planning businesses can take advantage of a £36bn opportunity by adjusting the way they market their services to women, according to new research.
The research, conducted as part of adviser trade body Pimfa's Under 40 Leadership Committee programme, found women are underserved by the financial advice market.
It cited a study by Boston Consulting Group and also the Financial Conduct Authority's Financial Lives survey which found that just one in four women held an investment product compared to one in three men.
But a report by Kantar found that women could account for £36.8bn of new business, with the Centre for Economics and Business Research finding that women will account for 53 per cent of UK millionaires by 2025.
The report recommended that advisers should change the way they market their services to women to focus less on investment returns and more on achieving financial security.
To support its findings, the research pointed to a survey conducted by Savanta on behalf of Pimfa which showed nearly 60 per cent of women said achieving financial security was the most important outcome from financial advice compared to less than 50 per cent of men.
The proportion of women who said "strong financial returns" were the most important outcome was less than 20 per cent which was a smaller proportion than for men.
The report said: "Investors are most likely to be interested in achieving financial security or meeting goals, and this is most pronounced among women. Therefore investment materials, communications with clients and client events should be designed with this in mind."
There were two examples of how advisers could implement this into their practice:
- Focusing on past performance numbers in a marketing deck is unlikely to appeal to women
- Events should focus on relationship building rather than investments, with events particularly created to address goals or major life events such as retirement or divorce
The report said: "Women want advisers who provide a holistic view of their circumstances and place particular value on advisers who can clearly explain their investment views and decisions."
While some have suggested advisers should focus on diversity in order to attract women, the research by Savanta found this was not especially important.
About 70 per cent of women said they had no preference about the gender of their financial adviser companred to about 80 per cent of men. But this meant there was a group of about 20 per cent of women who would prefer a financial adviser of their gender.
The report said: "This is even more important for the next generation of investors. Companies need to have a workforce which reflects the diversity of the client pool they are trying to attract.
"We have seen seen that women are also more likely to make referrals than men and this point can be applies to other female professional advisers that the wealth management industry interacts with.
"We as the industry should try to engage with a diverse range of private client professionals who also reflect out client base."
damian.fantato@ft.com
