Why should building relationships with women clients be one of your business' top priorities? A new study from Prudential Financial indicates that financial-services companies that provide adequate support for female clients—and take cultural influences into account—stand to gain valuable market share.
Prudential Financial's 2012–2013 "Financial Experience & Behaviors Among Women" report found that women today make up a majority of primary household earners (53 percent), but only 23 percent report self-confidence in making key financial decisions. Only 10 percent of women referred to themselves as "very knowledgeable" about the financial products and services available to them. (Prudential Financial is No. 9 in the 2012 DiversityInc Top 50.)
This means new growth opportunities for those financial-services companies—particularly those companies that leverage resource groups—that are attentive not only to women's needs but their culturally influenced concerns.
Understanding Women's Cultural Influencers
Differences in women's financial experiences and behaviors varied greatly among the different ethnic groups. This indicates that racial/cultural influences play a key role in determining how women approach financial security and planning, explained a panel of economic experts at Prudential Financial's event in New York. Prudential's Joan Cleveland, senior vice president of Business Development, participated as a panelist. Watch Prudential's video highlights from the event.
The study found:
- Asian (33 percent) and Black (31 percent) married women were their household's highest income earners, compared with only 19 percent of white women. White women were the least likely to be employed full time (33 percent) and were likely to be married (65 percent)
- Latinas, who were most likely to have children (65 percent), were more inclined to put immediate family needs ahead of their own financial stability and planning: 92 percent of Latinas prioritized "not becoming a financial burden to loved ones," and 73 percent said taking care of extended family was a main concern
- Black women, who were most likely to be single (40 percent) and employed full time (47 percent), prioritized being able to maintain their current lifestyle (94 percent). They were also most concerned with reducing personal debt (87 percent) and starting a small business (49 percent)
- Asian women were the most likely to use a financial professional (47 percent) and tended to place more emphasis on financial security. They had the highest median income ($77,000 vs. $51,000 average) and savings ($58,600 vs. $12,400 average), and 28 percent of live upscale lifestyles
- About one-third of white women had an adviser (36 percent), but 26 percent were most likely to delegate financial decisions to their partner. Having enough money to maintain their lifestyle (93 percent) topped their financial concerns
Resource Groups Provide Solutions
"Women's lack of confidence is increasing, which we can see as a knowledge gap as well," explains panelist Deborah Owens, CEO of Owens Media Group and an author, noting that market volatility has increased women's overall tendency toward risk aversion.
The solution—and likewise the opportunity—then falls to companies "to educate women on financial matters and help them build confidence," Owens says. It also helps to close the disconnect between immediate concerns and the right choices.
Strengthening the quality of the company-client relationship also should be a concern, say the panelists, as 35 percent of women reported they would leave their adviser if their relationship with their spouse were to end.
"These relationships still are very superficial," says Cleveland. "Companies need to do more to know women's needs. Advisers need to speak to women, really advise the women when they speak to the couple."
DiversityInc Top 50 companies, especially those in The DiversityInc Top 10 Companies for Executive Women list, know that best practices in diversity management, such as resource groups, can help their organization increase their understanding of the marketplace—and ultimately deliver sustainable business results.
Read these DiversityInc articles for more on how to improve your business—and your ability to attract women customers and employees—through diversity management: