Women and wealth: the impacts of technology-enhanced wealth management

Charlotte Ransom, Chief Executive Officer, Netwealth

Netwealth is one of the most innovative wealth managers that combines the best elements of a superior discretionary service with all the benefits of a technology-enhanced approach.  With the topic of women and wealth on the minds of many, how are female clients, who have long been underserved in the industry, reacting to this model? Charlotte Ransom shares her thoughts ahead of speaking at MoneyLIVE: Private Banking & Wealth Management on the evolving needs of female clients, the various barriers to investments and the benefits of technology-enhanced approaches.

You are a firm advocate for women taking control of their wealth.  In today’s wealth management landscape, what barriers – social or structural – are deterring female clients from investing?

It’s been fascinating for me to see first-hand how women think about the topic of personal finance. While for many of us wealth management is not where we would choose to spend much time, men are still seemingly better at getting to grips with this thorny subject. Despite equality of education in the developed world, and the impressive advance of women in terms of financial independence and wealth levels, we know that they are still often reluctant investors.

In part, I put this down to the fact that despite career pressures, women often still shoulder the bulk of domestic and family demands, simply making time more scarce for financial matters. These constraints are not helped by the fact that the wealth management industry is still unarguably male-oriented, often unwelcoming for women and full of jargon. These factors therefore present further obstacles to an overdue conversation or action. Lastly, women tend to be more cautious investors. Thus, when you take into account this and the other factors I mention, women are more likely than their male counterparts to feel comfortable sitting in cash.

This is a worrying situation, especially when we consider that over 40% of marriages end in divorce, and even more for couples in their 50s. Women also tend to outlive men by 3-5 years on average, exacerbating the need to ensure that investment capital is thoughtfully put to work. By not investing, or by leaving it too late, women create a huge yet avoidable wealth deficit.

“By not investing, or by leaving it too late, women create a huge yet avoidable wealth deficit.”

In what ways can private banks and wealth managers improve the experiences of female clients?

We need first to understand the backdrop against which many women are working, as I’ve outlined above. An exciting trend we are seeing among our female clients is the benefit of modern technology which can serve several very important purposes: it gives an unfamiliar investor confidence in terms of transparency and accessibility and it allows someone who is time poor to invest at times which suit their individual schedules. Importantly, too, technology makes it simpler to plan for specific financial goals in a way which is both empowering and offers us a sense of control. Once we can plan for what we will live on in our retirement, or when we can clearly compartmentalise the fees necessary for our children’s education, or figure out the potential cost of long-term care for an elderly parent, the topic of finance is brought alive and women become more confident and engaged investors.

However, technology is by no means the only answer. I also believe that having advisers is often a key part of the wealth proposition. To that end, I would like to see more females working in the private banking/wealth management community, where their communication skills would be put to good use. There is no doubt that some women will prefer to work with other women (for those that don’t, there’s no shortage of male advisers!).

“Technology is by no means the only answer.”

Finding a trustworthy wealth manager can be challenging to say the least. How have female clients responded to Netwealth’s technology-enhanced approach?

As I see time and again when women come to our offices, they have distinctive preferences when it comes to wealth management. They are willing to embrace digital technology, have a strong desire for clarity and transparency and feel great distaste at having providers who treat them as inferior or who hide the real costs of their service. Women are doers and also delegators, they have clear views on what they want to achieve and are keen to fit their financial decisions into the rest of their busy lives rather than having to do it all themselves.

And finally to wrap up, how might these ideas be transferred to other client segments, such as next-gen customers and millennial entrepreneurs?

We are finding that newer client segments such as next-gen, or clients who are likely to be less constrained by tradition, such as self-made entrepreneurs, have some similar characteristics. Modern technology is both expected and typically enjoyed among these groups. They are also focussed on transparency and value. Finally, and crucially, once a certain level of wealth is reached, there is often still a requirement to be able to speak to advisers to discuss important aspects of overall wealth planning.

Charlotte is the founder and CEO of Netwealth, a leading UK online wealth manager. Having started her career at JPMorgan she spent 20 years at Goldman Sachs, serving as a partner for 10 years. Her leadership roles spanned relationship management, marketing and product development in the Securities Division. From 2006 to 2011, Charlotte was head of Institutional Wealth Management and the Market Solutions Groups for Europe, the Middle East and Asia in the Investment Management Division. From 2012, she explored the impact of digital technologies on a variety of industries before founding Netwealth in 2015.

Charlotte will be speaking at MoneyLIVE: Private Banking & Wealth Management, taking place at One Whitehall Place in London, on the 12 November. 

MoneyLIVE: Private Banking & Wealth Management, held in London every November is the premier event for Europe's leading private banks and wealth managers to discuss the most pressing issues facing the industry.

It attracts C-level speakers and delegates from the world’s largest and most innovative banking players.