Friday, August 3, 2012

Women Want a Revolution

The results are in and, unsurprisingly, there are a lot of unhappy clients in the financial services arena. If I were a wealth adviser, I wouldn't want any of these responses to serve as my report card. (A note about the respondents: this is not a representative sample. This group of over 110 women responders are highly-educated, wealthy and activist-minded, since the respondents are those who were e-mailed or twitter responders to myself, Jayne Hillman, Melanie Hamburger and Sarah Granger.)

Interestingly, given that financial services are a "service" business, the level of a woman's wealth did not increase the respondent's happiness with their providers. The wealthiest respondents were no less displeased as their less affluent counterparts, in rating their services. Many women mention that they don't like the attitudes of their advisers. Some who want to do impact investing mentioned things like "being told that wanting socially responsible investing, or investing in women-run enterprises, is "cute and nice, but not the way to make MONEY".

As larger studies have documented, women feel misunderstood by investment marketers: "For an industry with an astounding amount of data on its customers, institutions still behave as though they have no idea who I am", wrote one respondent.

Here are some improvements that these women would like to see:

82% wanted greater transparency on fees, 87% wanted clear simple language and 76% wanted to collaborate to leverage their economic power. The strongest response from all questions on the survey was that 92% of women want to "invest my assets to align with my values". We also included a text box so that the respondents could say more about which values they most wanted to advance. Women wrote that they were interested in advancing women's leadership in the corporate world, specifically greater women's representation on boards of directors and in senior management. Women also wrote "accounting for environmental and social costs in financials/ reporting", "caring about others and not just profits", "more transparency, less lobbying of congress for special treatment", "sustainable business practices" and "companies that have a triple bottom line". Another benefit of values-based investing is that, according to this study by Merrill Lynch, investors with values-based investments have lower anxiety levels and churn their portfolios less, which can result in better returns in the long run.

This group has a large appetite for risk-taking. Over 73% are interested in the private markets, ie, in investing in private equity, venture capital and angel funds. There is a strong interest in better education in finance. 90% of women want "more confidence and/or confidence in my investing" and 85% want "more creativity and enthusiasm around money". All in all, the respondents are interested in a more holistic approach to investing their assets: one that accounts for their strongly held values around women's leadership, sustainable business practices, and sound environmental practices. Many wanted to "blow-up" the current system and start fresh. They'd like to feel a much higher level of trust and experience a customer-centric approach.

We conducted this survey because we'd like to help build a movement that satisfies women and men's desires to align their assets with their values. Those with wealth who donate 5% of their assets to non-profits each year while keeping their investments in the status quo are missing the ability to "liberate the 95%".  This shift will require some serious bucking of the existing financial services industry which has been built to have cookie cutter portfolios (to keep costs down) and to sell the financial products that they create (to keep profits up) . If an adviser strays from the pack, she will not be offered full liability protection if a client sues her for poor financial advice.

We'd also like to see more women feel enthusiastic about directing their investment dollars.  We look forward to the day when we overhear women walking along the beach at Chrissy Field talking excitedly about their portfolio and their recent allocation to a top-performing portfolio manager named Helena.

We look forward to any comments, ideas and questions that you may have.  Thank you to the respondents for taking the time to answer our survey! Marya and Jayne