Is banking for women really any different?

Private Banking - 4/19/2016

On April 12th 2016, Edmond de Rothschild and Maison Schiaparelli invited twenty women to a meeting held to discuss investment opportunities in the luxury goods sector and the entrepreneurial history of the mythical fashion house.
Françoise Neige, private banker at Edmond de Rothschild (France), fielded our questions. She heads the “Rencontres du 47” women’s network and has spearheaded a dedicated “Private Banking for women” service.

How do women relate to money?

Françoise Neige: The Boston Consulting Group has predicted that women will own half of all individual wealth in 2030, and two thirds by 2050. They already represent 10% of the world's billionaires1. Many are heiresses, widows or divorcees, and an increasing number of women, even though they remain a minority, are building up their own wealth through their careers or by creating companies.

Private Banks have only recently developed relationships with women. Until 1967, women had to ask permission from their husband to open an account and it was only during the 80s that they could borrow money in their own name. We are still feeling the weight of this cultural heritage today in 2016.  Women relate differently to money and wealth than men, who have been managing their assets for centuries! For this reason, we believe it is important to provide women with a personalised dedicated advisory service.

Between 80% and 90% of women will be in sole charge of their finances at some point in their lives. That is due to the increase in divorce rates and to women outliving men. Today, there are more single or divorced women than there are married ones.

Table 1: There are more single or divorced women than there are married ones.Source: Allianz Study, Women, Money and Power

Do women really have different expectations than men in terms of wealth management?

FN: I have been dealing with women clients for more than 15 years now, paying particular attention to their expectations.

Yes, women do indeed have a different approach to money. As their family lives and their careers are intrinsically linked, they need to reconcile their long-term interests, i.e. their life project, with short-term concerns, i.e. everyday expenses. For many women, money is synonymous with security and heritage (see table 2).

Only 2/3 of women are confident in their future financial stability. They are generally less optimistic than men in this regard. Divorced women are even less optimistic2.

Table 2Source: Allianz Study, Women, Money and Power

Furthermore, women give more value to the ethics of their investments and the meaning in their actions. 47% of women state that they would accept a lower return on investment should the target company present values similar to their own, compared to 38% of men3.

The last 15 years also showed me that women take their children, or their nephews and nieces, more systematically into account in their wealth management projects.

What does your approach involve in practice?

FN: Women's needs are immense, whatever their  personal and professional situation.  In order to provide the best response to their requirements, we draw on our full range of skills to establish long-term financial planning or invest in property, or prepare an inheritance.

The Global Investor Pulse Survey published in 2015 revealed that more than 1 in 5 (21%) female respondents confessed to being "not confident" about their portfolio, compared to 14% of men. This is not due to insufficient revenue or because they do not feel able, but because they are "uninformed about portfolio construction"4. Our mission is to ensure that our clients are provided with all the information that they need.

We also invite them to join our "Rencontres du 47" all-women network, which organises conferences on the latest economic and financial news, in the presence of our in-house experts, where they can ask questions freely and discuss these issues with their peers.