Women today create, inherit and control a greater proportion of wealth than ever before, yet many financial institutions are failing to adapt their approach to women’s financial needs, according to HSBC Private Bank’s latest report.
Women and Wealth: A Global Opportunity finds that wealthy women have historically been underserved compared with men, as many financial institutions have yet to fully embrace a client-centric approach to engage female clients. This is partly because they are failing to understand some of the gender differences between male and female investors.
Ida Liu (main picture), chief executive of HSBC Private Bank, said: “The greatest wealth transfer is underway and women are not just participants – they are decision makers, founders, investors and stewards of capital. With women building, inheriting, and directing capital at an unprecedented scale, the future of private banking will depend on how well we act as partners.”
The report, which is the latest in HSBC Private Bank’s Global Wealth Focus series, shows women are more likely to believe the purpose of their wealth is to plan for retirement or to fund their children’s education. More women also want to make a positive impact on society, and they are nine percentage points more likely to support philanthropy.
As women’s wealth grows – with approximately 40% of investible global wealth set to be controlled by women in the next five years, amounting to $113trn in assets (according to an estimate by McKinsey) – there are clear opportunities for firms to adapt their approach.
Lavanya Chari, head of wealth and premier solutions, HSBCsaid:“As we see more women join the ranks of the ultra-wealthy, we are not only seeing a greater understanding of the make-up of their portfolios and the companies within them, but also increasing demand for a full suite of world-class investment solutions to meet their specific needs.”
The report found that female investors remain underrepresented in private markets and direct investment opportunities. Private banks have an opportunity to expand access and engagement in areas such as private equity, venture capital and co-investments.
Also, many women report lower confidence in investment decision-making, reflecting an industry historically designed around male clients. There is an opportunity for private banks to provide clearer advice, education and engagement tailored to women investors.
Finally, female entrepreneurs continue to face barriers in building and scaling businesses, including access to capital and networks. HSBC Private Bank research also shows they are six percentage points less likely to have a mentor to provide business advice and guidance.