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Why female clients are ‘underserved’ by wealth management firms

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Women are controlling more assets than ever before but wealth managers are still failing to cater properly to this key demographic, according to WHVP managing partner Jamie Vrijhof-Droese.

According to a 2020 study by Boston Consulting Group, women currently control 32% of the world’s wealth, and are adding $5tn to the wealth pool globally every year. This share is likely to increase significantly in the coming years, the report said.

‘Female clients are currently the most underserved group of wealth management clients. And that’s a huge shame,’ Vrijhof-Droese told our sister publication Citywire Switzerland.

Many consider diversity merely as a marketing and PR opportunity, but neglecting female clients means that they will miss out on returns too, she said.

‘They missed the point that if you do this right, you can actually make a lot of money from it. If you want to stay relevant as a wealth manager, or financial service provider, you need to be speaking to female clients,’ said Vrijhof-Droese.

‘People who are currently mainly serving older male clients have to think about that because chances are that women will at some point inherit money. If they don’t have a plan or a strategy for that, they are going to miss out on a lot of assets.’

In the US, 70% of women change their advisors within a year of their partner dying, according to a McKinsey & Company article from 2020. In Switzerland, things do not seem to be much different, Vrijhof-Droese said.

When she took the company over from her father at age 26 at the end of 2020, she said several women contacted her looking for a new wealth manager.

‘I don’t think that it was necessarily because of me, but it was because they saw that we have a management team of two men and two women. They felt better represented’ she said.

‘One person had inherited the money from her father. She had previously always met the adviser together with her father. [The adviser] was the father’s age, while she was a lot younger. When she first went alone, the advisor and his team just told her what they wanted to do with the portfolio. When she spoke up and said: “I would like to do things a little differently,” they just shut her down and they weren’t really listening, because they were convinced that they knew better.’

Another woman got in touch after her wealth manager laughed when she brought up some concerns about inflation and told her she should forget about it.

For Vrijhof-Droese, the relationship with the client needs to be based on transparency, professionalism and trust.

‘As a person, you want to do business with another person. You don’t just want to talk about investments and performance. Of course, those things are important as well but what’s just as important is who the people behind the company are. Why do they do what they do? Why do they feel passionate about it? Why should I trust them with my hard-earned money.’

Since taking over, Vrijhof-Droese has revamped the company’s website and brochures in an attempt to make it easier for existing clients and potential new ones to understand the firm’s culture and values, and to learn more about the team.

The company also has a blog and a podcast discussing financial principles and market events.

As well as there being an increasing number of women, clients are also becoming more tech-savvy and often look on Google when searching for a new adviser, she said.

‘If you just have a landing page with a telephone number, people might not feel comfortable calling you. What’s extremely important is to also have online reviews that people can read to see what kind of experience other clients had with you,’ she said.

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