Women create, inherit and control a greater proportion of wealth than ever before, yet many financial institutions are failing to adapt their approach to women’s financial needs, according to a recent report.

Wealthy women have historically been under-served compared with men, as many financial institutions have yet to fully embrace a client-centric approach to engage female clients, and this is partly because many are failing to understand some of the gender differences between male and female investors, finds HSBC Private Bank’s Women and Wealth: A Global Opportunity report.

Women are more likely, the report notes, to believe the purpose of their wealth is to plan for retirement or to fund their children’s education. More women also want to make a positive impact on society, and they are, according to the bank’s Global Entrepreneurial Wealth Report, nine percentage points more likely to support philanthropy.

As women’s wealth grows – with approximately 40% of investible global wealth set to be controlled by women in the next five years, according to McKinsey & Co, amounting to US$113 trillion in assets – there are clear opportunities for firms to adapt their approach in certain areas, among them:

• Investment access – Women investors remain underrepresented in private markets and direct investment opportunities. Private banks have an opportunity to expand access and engagement in areas, such as private equity, venture capital and co-investments.
• Advice and engagement – Many women report lower confidence in investment decision-making, reflecting an industry that has historically been designed around male clients. There is an opportunity for private banks to provide clearer advice, education and engagement tailored to women investors.
• Entrepreneurial wealth – Female entrepreneurs continue to face barriers in building and scaling businesses, including access to capital and networks. They are six percentage points less likely, the bank’s research shows, to have a mentor to provide business advice and guidance.

“The greatest wealth transfer is under way and women are not just participants – they are decision makers, founders, investors and stewards of capital,” says Ida Liu, the private bank’s chief executive. “With women building, inheriting and directing capital at an unprecedented scale, the future of private banking will depend on how well we act as partners.”

Lavanya Chari, HSBC’s head of wealth and premier solutions, adds: “As we see more women join the ranks of the ultra-wealthy, we are not only seeing a greater understanding of the make-up of their portfolios and the companies within them, but also increasing demand for a full suite of world-class investment solutions to meet their specific needs.”