I clearly remember the day a long time ago when I called my fund company for the first time because I didn’t know how I was supposed to fill out the application form to open an investment account. I was afraid I’d sound uninformed and stupid.
I was also beset by fears and doubt about what I was trying to accomplish: How to decide what stocks to invest in? Where to find the information? Whom to trust and who to view with skepticism? How to learn about things like bonds? Should I be thinking about real estate instruments? These concerns may seem silly in retrospect. After all, it feels like the easiest thing in the world these days to do anything you want. The internet is free. The world is wide open.
Yet, is it?
Even today I see women facing significant challenges when they start to invest for their financial future. Why is this so?
Internal programming and self-image doesn’t jibe with investing
Where I came from and even where I am today, it is not exactly coffee-table conversation among women to talk about investing or to even admit that we (gasp!) actually have money to our names and we (double gasp!) actually have an interest in doing well with it. Couple this with whatever messages we have consciously or unconsciously internalized, and you have a recipe for massive internal barriers to do something that feels fundamentally alien and unnatural.
Industry attitude is a big barrier
While this is not uniformly the case, women face vastly different treatment at the hands of people who represent the financial services industry. I need to dig up the actual study references, but here is one example of research that proves that even among millionaire investors, women get worse treatment than men. You don’t have to stretch your imagination very far to understand how younger women with fewer assets get treated by the industry.
Industry positioning is geared to men
This is related to the second, but I’ve called it out separately because it impacts how you go about evaluating and selecting your investments. What I have seen to-date, much of it industry-based, suggests that the investing industry positions its offerings and value propositions towards “winning” and touts complex strategies and assets that typically tend to appeal more to the male buyer.
Additionally, the sales process and approach is geared linearly towards how men think and make purchase decisions. While largely anecdotal and qualitatively based, my assessment is that women’s objectives, decisions and purchase process, whether it is for stocks or clothes, tend to be very different.
Both want to do well for themselves, and in many cases, aspire to the same outcomes. But they get to that point on vastly different paths. Women’s paths tend to be more nonlinear and more information intensive. Consequently, the way that financial products are pitched doesn’t resonate with women. The fact that they are starting off with a negative stereotype doesn’t help when they ask for / seek more information pre-purchase.
The end-result is the same: a frustrated customer who is simply not getting what they need to make a “purchase” in the market of investment products. Nobody wins in this scenario.
Is there a better way? While there is definitely a case to be made for a more deep-rooted re-think of how we design, market and sell investment products to women, I think there are immediate steps any provider can take to quickly start making a difference to their female clientele. For example:
- De-biasing mechanisms such as checklists in front-line sales processes that ensure that the same variety and range of products and options will be offered to customers meeting eligibility criteria, regardless of whether the client or customer is male or female.
- Enhanced product design and packaging processes to formalize the inclusion of a diverse set of customer profiles or persona.
- Conscious search and incorporation of representative demographics on the business side, from design to sales, to ensure better product fit with the ultimate customer
Clearly there is greater opportunity to be tapped with more long-term approaches, but the above will offer quick benefits without significant up-front investment. The data can then guide future steps – the results should be able to speak for themselves!