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HNW & Ultra HNW Investors:
The female of the species is more cautious than the male!
John Clemens, Managing Partner, Tulip Financial Research Ltd
There are only 300,000 HNW and Ultra HNW households in the UK with substantial liquid assets: they own on average £2.5 million liquid. In just over half of these one person makes all the investment decisions, and 35,000 of these lone decision makers are women. In the other half investment decisions are made jointly: and that adds up to another 90,000 HNW women decision makers. So in these 300,000 households there are more than 100,000 women investment decision makers. Yet less than one in twelve IFAs, just 8% of the most widely used HNW & Ultra HNW investment advisers, are women, and there is an even lower proportion of women working as senior investment advisers within private banks and private asset managers. HNW and Ultra HNW investment advisers are well behind the times.
Because, as Bob Dylan sang many years ago, “the times they are a-changin!”. In the past asset allocation and investment was men’s work – he dealt with the money. And this male bias persisted in HNW and Ultra HNW households well past the time when the glass ceiling in employment was breached by women: young high earning, high flyers are now as likely to be women as men. This cultural lag within HNW and Ultra HNW households happened because HNWs are elderly, and Ultra HNWs even older: investment decision-making remained in a male time warp. But this pattern is now changing fast, and is reflected in the ages of today’s male and female HNW investment decision makers.; the average age of women HNW decision makers is late forties, that of men HNW decision makers is 60 plus. Women as major investment decision makers are increasing in numbers very fast indeed. This existing male bias within investment advisers is reflected in the types of investment advisers now preferred by wealthy women: by female HNWs and Ultra HNWs. These are much more likely to turn to their retail banks and accountants for advice than their male partners; and they are much less likely to turn to stockbrokers and private asset managers for advice. Why is this? It is not that women insist on women as advisers, it is because of the overriding masculine culture that still survives withint IFAs, private asset managers and stockbrokers. In retail banking and in accountancy the glass ceiling for women was breached years ago, and this has effectively changed the culture. Accountants and retail banks no longer expect the man to be the sole or even dominant investment decision maker: but this kind of culture often still survives within the IFA, private asset manager and private banking environments. Women are still, often treated by them as secondary and relatively unimportant in the investment decision process. Male and female HNWs and Ultra HNWs reflect tjhis in their respective asset allocations and strategies. Women have significantly higher allocations to cash & fixed interest and to property related investments. Men have more invested in shares and equity related funds other pooled investments. This reflects the cautious nature of retail bank and accountants’ views and advice compared with those of stockbrokers, private asset managers and, to some extent, IFAs. Women investors are turning to accountants and retail banks for advice because of their less masculine culture, but this does mean that overall women are getting different advice. This represents an opportunity for private asset managers and stockbrokers and private banks to change their culture and to appoint women in both senior and junior adviser roles. Their culture will then move more in line with the 21st century. Indeed , – as with the motor insurance companies, there is now scope for private banks or a private asset managers or IFAs to consciously target women in their client promotion and client service offerings. But this is unlikely to happen soon: the masculine culture is too well entrenched in the investment management and investment advice organisations to change quickly. John Clemens, Managing Partner, Tulip Financial Research Ltd
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