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Women and Wealth: How to Get it Right

The financial services industry is failing women—not just as investors but also as employees. Now's the time for everyone to move forward.

By Judy Marlinski

When I consider women and wealth, I see an environment where both sides of the industry have a tremendous opportunity to make meaningful progress and maximize their total financial wellness. On one side, women investors are leaving massive amounts of money on the table and by doing so, inhibiting own their financial futures. On the other side, wealth management firms are facing a daunting talent crisis and a demand for emotional attunement that is often outside the comfort zone of traditional investment managers. Let’s look at a few data points to support these two
perspectives.

Investors

Recent Fidelity research dispelled some of the more persistent myths about women and money. Women are often looked at as perhaps not “needing” to invest, but we uncovered a very different response: 35 percent of millionaires in 2018 were women, and by 2030, women will control two-thirds of the national’s wealth. What’s more, mothers are the primary breadwinners in four-in-10 families in the United States.

Additional research found that 56 percent of women were not investing outside of retirement, and were missing out on substantial opportunities to build wealth. But those women want to be doing better—72 percent of them plan to take steps in the next six months to make their money work harder for them. In another study, we found that only 15 percent of women investors stated they did not enjoy investing at all. So by and large, we can dispel the “woman as an uninterested investor” myth.

This lack of participation is not because they don’t have assets. In fact, over a third of women report having $50,000 or more just sitting in savings, eliminating the chance for that money to meaningfully grow over time. To paint a picture of the impact here: a recent report from Kantar cited that the collective failure to engage women could be costing our industry just shy of $800 billion. I found this figure remarkable —and see the tremendous opportunity for those who get it right.

The Financial Services Industry

Across the financial services industry, firms are are staring down an incredible talent crisis. Specifically within wealth management firms, those retiring from the field will outpace new entrants to the profession. Only 12 percent of advisors are under the age of 35Graduates entering financial services have dropped from 45 percent in 2008 to 31 percent in 2018. Among women specifically, the leaky funnel is in full effect: about half of entry-level employees are women, but that figure drops to 19 percent among C-suite executives. Simply put, we need more people attracted to this industry
—and we need to retain them better.

We also need different skills and perspectives. Fifty-four percent of advisors agreed that the advice industry needs to do a better job of hiring and developing a more diverse group of advisors to reflect the client base. What’s more—we need these people to be proficient in different areas. Softer skills—which include qualities like empathy, interpersonal skills, and communication—are increasingly important as investors demand personal and higher-level services, beyond investment management. Fidelity research found that female advisors were more likely to tap into those skills, with 82 percent agreeing that listening skills (including expressing empathy) had served them well in their careers compared to only 69 percent of male advisors.

So, we know women have money and want to invest. We know wealth management firms and the financial services industry in general need female employees. Where do we go from here?

I propose we stop thinking of this as an issue to be solved be a select few, and embrace the idea that women’s issues belong to all of us, regardless of gender. This isn’t critical to me just because I am a woman, but rather because I’m a leader at a financial services firm and an investor myself. We must all serve this industry better, on both sides, to drive gender diversity.

So I ask you to join me in doing whatever is within your purview to help us all move forward. Become an active participant in your own financial life. Talk to your niece about her college major. If you work in the industry, take a look at the benefits and flex programs at your organization. Consider offering returnships—programs designed to ease workplace reentry. Position your career in financial services as a noble one which helps people achieve their financial wellness and personal aspirations. There are incremental steps all of us can take to drive progress and empower women to take a front seat in their own financial lives, and to increase consideration of a career in financial services.

Judy Marlinski is president of Fidelity Institutional Asset Management.

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