In many ways, Sallie Krawcheck said, women are a larger emerging market than China.<\/p>\n
Krawcheck, chairwoman of the Ellevate network for professional women, spoke to the crowd gathered on Monday morning in New York for the IMCA 2015 New York Consultants Conference about the significant opportunity available for financial advisors in the largely untapped market that is women.<\/p>\n
\u201cWhat if I told you there\u2019s a potential client base that holds a majority of wealth in this country, represents 45% of U.S. millionaires, will inherit 70% of the $41 trillion that enters generational wealth transfer over the next 40 years?\u201d Krawcheck said. \u201cNinety percent of them control their money on their own at some point in their lives; they represent today 60% of college students and a greater percent of graduate students and still growing. They start more businesses at twice the rate of the rest of the population. They\u2019re first-time homebuyers at a greater rate than the rest of the population. They\u2019re breadwinners or co-breadwinners in 60% of households, and they live longer than the rest of the population by 6 to 8 years and they\u2019re healthier while doing so. You\u2019d say, \u2018That\u2019s one helluva market, Sallie.\u2019\u201d<\/p>\n
This potential client base Krawcheck is talking about? It\u2019s women.<\/p>\n
\u201cWomen are huge and they\u2019re underserved,\u201d Krawcheck said. Adding, \u201cWhen we step back and think about it, our business is a business by men, for men. I always say here, \u2018I have nothing against middle-aged white guys. I\u2019ve been married to a couple of them.\u2019 But we\u2019re going to have to think differently if we want to attract and approach and engage with this enormous market.\u201d<\/p>\n
The majority of woman-held wealth is unmanaged, Krawcheck said, pointing to data gathered by weekly polls of the nearly 34,000 professional women that are Ellevate members.<\/p>\n
Just 14% of the women in the Ellevate network said the industry meets their needs well, and three-quarters of Ellevate\u2019s members do not have a financial advisor.<\/p>\n
\u201cAnd these ladies, I\u2019m telling you, are right in the spot of what\u2019s attractive to our industry,\u201d Krawcheck said.<\/p>\n
Of the Ellevate members that do have a financial advisor, two-thirds of them said the advisor doesn\u2019t understand them.<\/p>\n
\u201cWomen report that they feel this industry talks down to them, patronizes them and doesn\u2019t meet their needs,\u201d she said. \u201cIt\u2019s no wonder that women rank our industry 33 out of 33 \u2014 dead last \u2014 of the industries that serve them.\u201d<\/p>\n
\u201cWomen report back that our industry is way too complex, way too complicated. And the language we use, the jargon we use? Way too much,\u201d Krawcheck said. Women don\u2019t care what an \u201calpha\u201d is, a \u201cbip\u201d is, a \u201cstandard deviation\u201d or a \u201cMonte Carlo simulation\u201d is, she said. \u201cAnd when we use jargon with them,\u201d she added, \u201cthey pull back.\u201d<\/p>\n
\u201cWomen tell us they\u2019re not interested in talking about IBM stock vs. HP stock, non-issue and large-cap value vs. small-cap value, or this money manager with this performance vs. that one, or this active ETF vs. that managed account,\u201d Krawcheck said.<\/p>\n
Most women, according to Krawcheck, aren\u2019t interested in where the stock market is going. \u201cThey\u2019re not particularly interested in whether their investments are outperforming because it doesn\u2019t directly matter to reaching their goals,\u201d she said.<\/p>\n
Women also aren\u2019t interested in the \u201cwhiz-bang products we have, the latest innovation in liquid alts, what an inverse ETF does,\u201d Krawcheck said. What do women want? \u201cThey want to be served, not marketed to. Served, not marketed to,\u201d Krawcheck repeated for emphasis, adding, \u201cAnd they know the difference.\u201d<\/p>\n
Overall, Krawcheck said women look to advisors to provide them a safe place.<\/p>\n
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