Many years after some of the nation’s largest financial services firms set out to win business from Boomer women, we’re still in a spot where little has actually changed. Like a chauvinistic boss who thinks his resistant female employees will finally respond if he just keeps trying, the industry’s attempts to charm women assumes that simply wanting to succeed will get them to respond differently. Well, it hasn’t worked.
Will a new set of tools – digital newcomers, robo-advisors, online communities, and more personalized initiatives – change that outcome? It’s too soon to tell.
Whatever Wall Street has done isn’t working
I first wrote about this problem in 2009, when we learned that two-thirds of women actively distrusted their financial advisers.
Marketing is part of the problem. Over the years, financial service firms have used just about every marketing tool available to turn women off.
As only one example, consider all the imagery that shows women in a dependent posture towards men, such as standing behind them or leaning against them. Most women are insulted by such imagery because they take charge of their family’s finances as they age. But that’s not all: Others – including one out of three Boomer women who are widowed or divorced – were saddened by the unnecessary reminder of their losses.
These are some of the reasons that a recent survey by Next Avenue confirmed that only 10% of women believe Wall Street pays as much attention to women as to men and 71% of women say that financial firms are not in touch with women’s real needs and concerns.
It would be easy to write yet another blog post on the changes that would make women feel more respect from Wall Street, but it turns out that feeling disrespect isn’t the only thing keeping women from entrusting her financial future into the hands of Wall Street.
Wall Street itself is part of the problem
Structural problems have worsened women’s distrust. Women understand that most financial advice is riddled with conflicts of interest. Insurance companies want to sell insurance, brokerage firms want to sell stock, and no Wall Street firm seems to take an interest in customers first. Ninety-one percent of women recently reported that financial firms are more interested in selling them than educating them.
It’s not even clear if Wall Street and women agree on their ultimate goals. Financial firms seem focused on selling “success” even though women tell us that they seek financial security first. Firms also seem more interested in shaming rather than empowering women when the statements women hear from advisors make them feel at risk: “You aren’t going to be ready for retirement.” These statements don’t provide support—if anything they make women want to run the other way.
Can technology answer women’s financial needs?
A new generation of startups is tackling this challenge with technology using digital tools to put the power of planning for the future back into the hands of women themselves.
Some of these technologies work as robo-advisors—digital investment managers that manage your money according to a plan you approve. Worth FM, an offshoot of financial published Daily Worth, is only one example. Others include GoldBean, SheCapital, and Ellevest.
Then there are digital tools that provide custom financial advice without trying to invest your money. Examples include Learnvest—purchased in 2015 by Northwestern Mutual—and SUM180. SUM180—launched with input from Vibrant Nation Bloggers—provides each subscriber with only the three next best steps for that individual to take based on exactly where she is on her own financial journey. Founder and CEO, Carla Dearing, says the three-step plan is “more like Weight Watchers than Morgan Stanley.”
I don’t know whether women will ultimately want a different tool than the tools men use for managing money, but I do know that products and services that work for women usually end up pleasing men, too.
Data confirms that digital tools can solve problems that traditional industries cannot figure out by themselves, just like taxis can never be useful in the way that Uber is. The financial industry faces stereotypes and internal conflicts that have made most women hate it; which is why the industry may need to reevaluate an entirely new way of engaging women. It can’t hurt to try.