Financial Services Industry Falls Short in Serving Women Investors on What Matters Most to Them Pershing Study Says

March 5, 2015

Advisors must understand that women invest with a purpose in mind in order to effectively serve them

JERSEY CITY, N.J., - Pershing LLC, a BNY Mellon Company, today released a new report entitled, Women: Investing with a Purpose, exploring what drives women to invest and how advisors can best serve them based on those influences. While financial services firms have been ramping up their efforts to reach women investors, the report provides insight into critical gaps that still exist when it comes to what women want, what they need and what they are receiving from their financial advisors and firms with which they work.

Of the women who work with a financial advisor, 72 percent said they are very satisfied with their primary financial advisors. This finding points to room for improvement in advisors’ interactions with their women clients. Compared to men, women investors were more likely to want improvements related to their advisors' soft skills. Women tended to highlight more than men “understanding my goals,” “listening to my needs,” and “patiently answering my questions.” Women were less likely than men to suggest their advisors could improve in “picking investments that perform better” (27 percent of women compared to 36 percent of men). Interestingly, nearly half of women (47 percent) said there was nothing that their advisors should change when asked what areas their financial advisor can improve.

“While there are common threads among all investors in terms of their expectations of their financial advisors, these findings suggest that an important factor is being overlooked by advisors working with women investors, and that is the purpose behind the reasons they invest,” said Kim Dellarocca, managing director at Pershing. “This missing factor may contribute to why 35 percent of women respondents who do not use a financial advisor say they don’t trust financial advisors are working in their interests. The reality is that a woman’s desired level of understanding can be different, which requires advisors to explore concerns, goals and trade-offs with greater directness and rigor.”

Underlying many of the survey findings are unique challenges that women face later in life that stem from realities including their having longer life expectancies, lower incomes during their working years, potentially higher medical costs and a greater motivation for the beneficiaries of their investments to extend beyond themselves. Given these challenges, increased clarity of clients’ goals can influence the ideal blend of solutions that may create more confidence and better experiences for women investors.

According to the study, retirement, education, flexibility and legacy are four common goals that drive women to invest. For each of these purposes, the paper provides actionable ideas for advisors to help guide women clients to the best investment approach, including:

  • Purpose 1 - Retirement: This is the primary reason for which women invest, and can be the most daunting for them. Advisors should focus part of their conversations with their women investors specifically on retirement and work through a theoretical timeframe. While there is no formula to predict a lifespan, the goal is to replace some of the ambiguity with numbers and to discuss risk tolerance. While advisors should not push their clients into a more aggressive investment approach, they can illuminate how an overly--conservative approach might result in a shortfall in their retirement income.
  • Purpose 2 - Education: For many women, saving for higher education opportunities is a critical and often overwhelming goal. About 47 percent of high-income women are concerned with financing their children’s education, compared to 25 percent of all other affluent investors. As with retirement, advisors should discuss with their clients a timeframe based on ages and funding based on educational goals and tuition cost trends. It is critical for advisors to demonstrate that they understand that college savings is a key investment for their clients and that they can help them quantify and financially prepare themselves.
  • Purpose 3 - Flexibility: Women seek financial flexibility in their lives in the form of easy-to-access liquidity that gives them breathing room if their lives are disrupted by matters beyond their control, such as a divorce or a spouse’s death. Advisors should explore the topic of financial flexibility with their women clients, including those who are single. Boomer-aged clients may be increasingly focused on potential eldercare demands in the coming years, while other clients of all ages may have concerns about adequate coverage with their employer’s policies and overall financial stability in the event of unforeseen circumstances.
  • Purpose 4 - Legacy and Community: Many women with significant financial means aim to make a difference in their communities and for future generations. Women contribute an average of 3.5 percent of their wealth to charity, compared to the 1.8 percent that men contribute on average. Chances are that wealthy women investors are already pursuing these discussions with their advisors, but women clients with slightly lesser means may also view this as an important purpose for investing. Recommending a small step, such as an investment directed toward funding modest gifts to people or organizations down the road will leave a client feeling more confident that her charitable impulse is backed up by action.

To obtain a copy of Pershing’s whitepaper Women: Investing with a Purpose, please visit http://www.pershing.com/womeninvestors.

i Spectrem Group. Future Financial Considerations of High Income Women. [Online] 2014. http://spectrem.com/Content_Press/press-release-january-13-2015.aspx.
ii Barclay’s Wealth, “Tomorrow’s Philanthropist,” 2009.

About BNY Mellon's Pershing

Pershing and its affiliates provide global financial business solutions to advisors, asset managers, broker-dealers, family offices, registered investment advisor firms and wealth managers. A financial services firm located in 23 offices worldwide, Pershing provides business-to-business solutions to clients representing 6 million active investor accounts on the U.S. platform. Pershing affiliates are members of every major U.S. securities exchange, and its international affiliates are members of the Deutsche Börse, Australian Stock Exchange, Irish Stock Exchange, London Stock Exchange and Toronto Stock Exchange. Pershing LLC (member FINRA/NYSE/SIPC) is a BNY Mellon company. Additional information is available on pershing.com, or follow us on Twitter @Pershing.

About BNY Mellon

BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment management and investment services in 35 countries and more than 100 markets. As of June 30, 2016, BNY Mellon had $29.5 trillion in assets under custody and/or administration, and $1.7 trillion in assets under management. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available on www.bnymellon.com. Follow us on Twitter @BNYMellon or visit our newsroom at www.bnymellon.com/newsroom for the latest company news.