Gender equality has been a big topic in the wealth sector for the last few years and research shows firms need to do more as they are missing out on a lot of money by inadequately serving female clients.
Global consultancy firm Oliver Wyman released its 2020 Women in Financial Services report, which analysed more than 460 firms, about 9,000 senior leaders, and 37 countries and jurisdictions.
It estimates that financial services firms are missing at least a $700bn (£545bn, €635bn) revenue opportunity each year by not fully meeting the needs of women customers.
To capture this revenue, firms should not treat women as a single customer segment.
Rather, firms must understand the needs of their women customers and create products and services tailored to those needs – resulting in better products overall for all customers.
For example, the report found that retail and wealth products are not consistently designed for women’s financial lives and other products that appear to be gender-neutral in fact default toward men.
The report found that women are more likely to be uninsured and under-insured than me.
If insurers sold life insurance to women at the same proportion of their income as men, they could generate $500bn in new premiums.
Oliver Wyman said that women invest more of their wealth in cash than stocks and bonds compared to men.
If wealth managers invested women’s wealth in the same way as for men, they would bring in $25bn in assets under management from moving money held in deposits.
This would be in the first year alone.
“Women are arguably the single largest underserved group of customers in financial services,” said Jessica Clempner, principal at Oliver Wyman and lead author of the report.
“Despite playing increasingly influential roles as buyers of financial services, their needs are not consistently being met.
“Firms are leaving money on the table by not listening to and understanding their women customers.”
Women in the industry
In addition to looking at women as customers, the report examines women as employees, supervisors, and shareholders, and concludes that firms must take a “broad approach” to gender diversity to make meaningful progress.
The industry is making the fastest progress on increasing the number of women in senior leadership roles since the start of its index in 2003.
The proportion of women on executive committees has increased to 20% from 16% globally since 2016, and the percentage of women on boards has reached 23%, an increase of 4% since in 2016.
Asset managers and insurance companies had on average 24% and 18% of women on executive committees, respectively.
This was 26% for asset management and 24% for insurance, when talking about women on boards.
However, the industry still has a long way to go.
Chief executive and chair representation remain far too low, at 6% and 9%, respectively.
Some 21% of financial services companies’ executive committees and 15% of boards still consist entirely of men.
“Gender balance impacts a broad set of stakeholders in financial services,” said Ted Moynihan, managing partner of financial services at Oliver Wyman.
“If the industry is to continue to make progress on gender balance, firms will need to recognise this and take a broad approach.
“Doing so will force gender balance onto the critical path for the chief executive and will deliver better business outcomes.”