Wealth management is steeped in the conventions of an age when the patriarch took care of everything and got his best investment tips while golfing with his (male) bankers. As recently as 2016, the Boston Consulting Group conducted a survey of wealth managers in which only 2 percent said they considered women to be a specific client segment and had adapted their services accordingly. Yet the same study found that women hold more than 30 percent of all global private wealth, and their wealth is expected to grow by about 7 percent annually over the next several years. Memo to wealth managers: Neglect female clients at your peril. A number of firms are, in fact, starting to recognize that if they don’t make their financial services appealing to women, they will lose out on having some of the world’s movers and shakers as clients.
Such firms encourage a multifaceted approach. “We’re in the humanities business, actually,” says the New York–based wealth manager Sherry Paul, of the UBS financial-services team Sherry Paul Partners, who studied philosophy in college. “Beyond just investments, we’re helping our clients manage life and all of its disruptions, and we find that women want collaborative, holistic conversations that empower them to comprehensively navigate their lives.”
Paul’s work is part of an initiative at UBS to increase the financial confidence of women. Mara Harvey, head of UBS’s ultrahigh-net-worth businesses in Germany, Austria, and Italy, says the company is leading a 4-year-old initiative, which has pledged to increase the financial confidence of 1 million women worldwide within the next 4 years and funnel capital to SDG 5, the United Nation’s sustainable-development goal to achieve gender equality. Others that specialize in a female clientele include Brown Brothers Harriman, which operates a private banking center for women and wealth, and former Wall Street executive Sallie Krawcheck’s robo-advisory firm Ellevest, which Krawcheck has said she plans to expand with a personal financial advisory service for high-net-worth women.
Harvey and UBS managing director Olga Miler helped design UBS’s Unique program after hearing from many women who had sat and watched as wealth advisors talked to their husbands and ignored them—something that seems to happen frequently in the industry. Chantay Bridges, who works at a real estate firm in Los Angeles, had that experience when she met with two wealth advisors last year. “My husband was busy with work, and I’m the one who handles our finances, so we decided I’d start the process of looking for someone to manage our portfolios,” says Bridges. “One advisor said he didn’t want to talk unless my husband was there. Another asked about my husband’s career, his savings, and his retirement goals but not mine. I earn a high income, but he seemed to assume I was a stay-at-home wife.”
When the Center for Talent Innovation (CTI), a research group in New York, conducted a study of women and wealth in 2014, it found that 67 percent of the women who worked with wealth advisors felt their advisors didn’t understand them, or just weren’t interested in them. But wealth managers who gear their practice around women will be less likely to ask, “What does your husband do?” and more likely to have a conversation about your values, what you want to achieve with your money, what you hope your children will do with it, and what your family dynamics are like. They will also speak plain English. Traditionally, wealth advisors sometimes use jargon such as beta, standard deviation, or relative value deliberately, to make an investment sound too complicated to explain—the better to steer you into holdings that pay the advisor a high commission but are not necessarily right for you. But wealth advisory teams like Harvey’s at UBS are more interested in educating and supporting their clients so that they can be confident about what they’re doing with their money.
Financial confidence doesn’t always come easily to women, even if it should. In the CTI study, researchers conducted a literacy assessment that men and women passed in close-to-equal numbers, but among participants in the United States, the women were 44 percent less likely than the men to consider themselves knowledgeable about financial matters. UBS studies, however, have found that women tend to take a less risky, more systematic approach to investing than men do, with an eye toward fulfilling their goals rather than beating the market, and that systematic approach is more successful over time. Harvey believes an advisor can help a female client develop confidence by guiding her through a discussion of life goals and personal preferences, followed by a discussion of exactly what is in her portfolio, how much risk it carries, and whether the money is going into companies that she believes are doing something good for the world. Harvey says, “You should know what your money is doing all day.”
Finding a wealth manager who truly understands you is like finding a soul mate; it’s a matter of personal chemistry, and the search can take time. Most women interview at least four or five wealth managers before they find the one who is right for them. And since it’s a partnership, it takes both parties to make it work well. Here are five things you should do to make this a happy meeting of minds.
Before you choose an advisor, ask a lot of questions
“I ask, ‘Where do you invest your own money and how much did your personal portfolio go up last year?’ ” says Arlene Bassett, an executive business coach in New York. You want to know if your wealth manager has a successful investment philosophy, after all. In a new edition of her book Wealth Management Unwrapped, Charlotte Beyer, founder of the educational and networking group the Institute for Private Investors, suggests asking about the firm’s policies toward women—how many women does it have on the board and at senior levels, what sort of maternity-leave policies and professional training does it offer—to gauge whether the corporate culture encourages treating clients as something beyond a stereotype.
Also ask if the advisor has other clients whose circumstances are similar to yours, and therefore has experience with what is important to you. Ask how the fees are calculated—an hourly rate, a fixed fee, or a percentage of your assets and earnings—and exactly what other costs you will be paying. Ask what influences the advisor’s recommendations; you’ll want to work with an independent advisor who can sell products from other firms in addition to her own.
Map out your assets and create a plan
Before you even begin to talk about where you’re going to put your money, lay out a life plan that includes not only a full accounting of your assets, but your own statement of what you want to do with your money over time, and how much money you can afford to lose.
Make it a family affair
Most advisors who focus on women say it’s important to acclimate their children to wealth, albeit one step at a time as they grow up. “We like to meet with the children when they’re in their late teens, then work with them separately when they’re in their 20s,” says Barbara Young, the CEO and cofounder of Cypress Wealth Advisors in San Francisco and member of TIGER 21 investment group. Enlist your wealth advisor to spearhead family meetings and guide your family in defining the family mission.
Many women become good friends with their wealth advisors. You talk frequently—at least every quarter, and in some cases every week. You have lunch together and invite each other to fund-raisers. But your financial advisor’s primary goal is to manage her clients’ money, and her time commitment to you depends partly on the size of your assets under her management. If you take money out of this particular account, she might have less time for long lunches. On the other hand, you are the client and it’s your prerogative to take your money out if you ever decide you will be better served elsewhere.
Become part of a community
Many private bankers host occasional events for their clients to meet. Lean on your wealth manager, too, to provide introductions to other people with mutual interests—a like-minded philanthropic target, say, or a similar plan for selling your family business. Community building can enhance your perspective of what is possible when it comes to investing your money and your human capital. Besides that, says Harvey, it will make managing your wealth more enjoyable, which is something she says should never be discounted. “Women in particular have asked us one for one simple thing,” she says. “Can we make engaging with a banker fun?”