Her Money Matters - The Smoking Gun

The fact that women underinvest and have investment rates that are significantly lower than men’s is not new information. This underinvestment is important as it affects life-time economic outcomes for women. They earn less and are poorer at every age. They are, in the majority of cases, financially worse off in the case of divorce or the death of a spouse. The effect of lower earnings and time taken off from jobs and careers to care for children, parents and often spouses combines with their?lack of investing?to make them significantly worse off financially than men. It’s also a huge market opportunity. Up to $700 B as I noted in the previous edition of Her Money Matters.?

The issue has been studied and talked about for years, and yet it continues to defy easy solutions. The?financial industry?continues to be dominated by men (not a judgement, just a fact), and most of its marketing either targets men by default or, misses the mark when trying to appeal to women. The question of why this is defies easy explanation. Is it because of different genders’ natural affinities for certain products??

Marketing firm?Kantar?found that “Men favour brands traditionally associated with male spheres of influence such as cars or financial products, compared to women who feel a more meaningful connection with brands associated with day to day purchases such as beauty and clothes.” They found that 22% of men value financial autonomy versus only 17% of women while women cited sexual and body autonomy as greater factors that contribute to their sense of self-esteem (27% of women versus 23% of men). Kantar concludes that while women make 80% of household purchase decisions, “they are not being listened to or seeing themselves reflected in brands.”?

We can see this reflected directly in the branding of new financial products and services. Despite decades of awareness of this issue and struggles by financial institutions to onboard more women, Dave, Marcus, Albert are all neo banks and fintechs. But where are Molly, Sally and Sue? Does the name Nerdwallet really appeal to women? or Blacksteel, a new kind of credit card? Do I really need a guy with a beard sitting on a green sofa to tell me how to manage my money? or worse yet, telling me to go “ask your CFO to explain it to you?” (true story).?

"Actor Jim Conroy shares a couch with a hopeless investment researcher where he explains that TD Ameritrade has a personalized education center." (https://www.ispot.tv/ad/ZYyi/td-ameritrade-the-green-room-binge-learning.?

Despite what appears to be much hand wringing and angst about how to appeal to women customers, according to??a recent report by?BNY Mellon, almost 90% of asset managers say that when it comes to customer personas and images of who their ideal customer is, their “default investment customer is a man.”?

Here are the story boards from the ad agency who created this ad. This will give you a better idea of the underlying targeting...

Almost 75% of asset managers admit that their investment products target men, using imagery, messaging and metaphors, such as language associated with competitive sports, risk taking and “aggressive high performance” to sell their products.?

They pepper their speech with jargon, acronyms and terms with which even I, with more than 35 years of business experience, a high degree of financial literacy and an MBA, am sometimes unfamiliar. CAGR, IRR, ROI, ROE, APY, APR…alphabet soup anyone??

According to Stefanie O’Connell, author of The Broke and Beautiful Life,?

“The idea of performance and wealth building have become conflated in a way that is not necessarily healthy. Investing has become much more about performance, gamification, success or achievements and less about building wealth over the long term.”?

The Marketing firm Kantar confirms this with studies showing that women report that up to 85% of marketing that targets them, misses the mark.?

So where's the smoking gun? Try this fact for starters:

The percentage of asset managers who say their default customer is a man.

Is it any wonder that the financial services industry struggles to onboard more women customers? In January 2021,?The Wall Street Journal?reported how onboarding more women customers would be key to the ongoing growth of the online trading platform Robinhood. At the time of writing, only about a quarter of the company’s customers were women and their culture was accused of being too?"broey."

But with a lack of experience in consumer marketing that connects with women, is it realistic to expect that a male dominated industry will be able to crack this problem anytime soon? So far, we see the same biases that appeal to and favor men that characterized the traditional finance industry appearing in the new digital economy and fintech startups. In fact, when Goldman Sachs’ Apple branded credit card launched, its algorithm was accused of?gender bias?against women for granting them significantly lower credit limits than men, even in cases where income and assets were similar. While there are objective factors as to why this is the case, if we consider that creations are often made in the image of their creators, should it be any surprise that the same biases that exist in the real world show up in the virtual world??

While the percentage of women in financial services is gradually increasing, they still remain a minority. And, to rise to success in an industry so traditionally heavily dominated by men, it is possible that they too, consciously or unconsciously, take on the inherent biases of the institutions that they work in. Often, to specialize in the finance industry they take on the unconscious biases of this industry, even though they bring a much-needed fresh perspective born of their differing experiences. Culture is hard to change and will continue to be hard to change until and unless women (or any under-represented group) begin to make up 25% or more of the critical mass of a company or organization according to a landmark?study?by Damon Centola at the University of Pennsylvania.

She Banks is a new Fintech platform and financial community for women.

Many minorities and affinity groups are tired of waiting for this day to arrive and have started their own fintechs to serve their various communities. For example,?SUMA Wealth, started by Beatriz Acevedo, has found success with the Latinx community while ?Daylight is a neo bank for the LGBTQ+ community. But isn’t this the way it should be? Instead of trying to change old economy legacy institutions or go to battle with the male dominated tech industry behind the rise of fintech, why not just do an end run around them and start up something new?

It’s often far easier to build a green field enterprise from scratch than to retro fit an old one that has firmly entrenched legacy systems, including most of their executive personnel. And, trying to take a brand, any brand, and make it appeal to everyone means often it appeals to no one. It is a rare brand that can be everything for everyone, especially when your target market segments have not only different approaches and levels of confidence in buying financial products and services but needs for different products to fit their life journeys.?

This is the beauty of the new digital banking revolution and why we started?She Banks. To give women the financial confidence they need to decrease debt, increase savings and start investing. Without any confusing jargon or telling them to go ask their CFO. Or making them sit on a green couch and listen to the guy in the beard.

So let’s give guys a break for once, stop trying to take their toys away, and just start something new.

There’s plenty to go around for everyone. $700 B in fact.?