BlackRock is targeting female investors by upping its research and education around women and investing.
Gender diversity in the industry is also a key area the firm is willing to put its sponsorship dollars behind. This focus also benefits BlackRock’s image with clients, particularly those that have gender diversity as part of their investment philosophy.
Hollie Fagan, (pictured), head of BlackRock’s RIA business, shared her firm’s strategy with FA.
BlackRock is working with advisers to underscore the different approaches men and women take when investing. As part of this, BlackRock’s annual Global Investor Pulse Survey gauged the difference in investing attitudes and behaviors between the sexes. The survey’s findings revealed women place more priority on the day-to-day running of the household and budgeting. Women also don’t enjoy investing. As such they tend to hold more money in cash than men and are more risk averse.
The survey also found both men and women are falling short when it comes to retirement preparedness but women lag behind men by about $3,000. Though both genders experience the shortfall, it’s important to zero-in on women because they tend to outlive men, Fagan noted. “Not only are they not saving enough now but they’re likely to outlive their male counterparts,” she said.
BlackRock surveyed 30,500 respondents in 20 countries, including 4,000 Americans, 1,960 of which were men and 2,040 women.
While most female advisers tend to be clued-up on ways of engaging women, most financial advisers are men, Fagan noted. Just about 23% of those with the certified financial planner designation are women, according to the CFP Board.
“Typically the education or the conversation that advisers are having with their clients is directed at their male audience,” Fagan said. “Even if a couple is sitting together in an office with a financial adviser, it’s important for that financial adviser to be able to speak to both of them and understand the differences that exists between both of them.”
BlackRock has been teasing these findings out via social media and its blog. The firm also presented the survey data recently at a forum BlackRock held for female financial advisers in San Francisco. Most attendees were CEOs, chief marketing officers and chief investment officers at some of the largest RIA firms in the industry, Fagan explained.
While the women at the forum already knew this information anecdotally, the survey provided them with hard data they could take back to their practices, she noted. “When they went back to their colleagues, it was great to have the data we provided them to help inform their colleagues around why some of these gender differences are important to understand when you’re crafting marketing messages or client communications,” she said.
For example, to target women, advisers need to avoid jargon and develop a financial plan which clearly illustrates progress, Fagan said. By doing so advisers can get past the short-term focus and general dislike for investing, she added. “The financial plan keeps women engaged,” she said. “Financial planning allows the financial adviser to put it [investing] into the terms that a woman understands: Am I on track? I don’t care about my particular investments, I don’t care about diversification. What I care about most is whether I’m on track to achieving my goals.”
At a time when advisers are looking to add more robo-like services to attract Millennials, it’s useful to understand how women view these services, Fagan added. Seventy-two percent of millennial men and 45% of millennial women indicated interest in robo-advice, according to the survey. Women may become more interested, however, as robo interfaces evolve to become simpler, goal-oriented and show how everyday decisions can lead to tangible income in retirement, Heather Pelant, head of BlackRock Personal Investing, previously told FA (FA, 3/8). Fagan did not provide comment on how Future Advisor, BlackRock’s recently-acquired robo-adviser, may evolve to better serve women.
She noted, however, millennial women are more interested in robo advisers than women in any other generation. For example, 23% of women aged 55 to 64 are inclined toward these services as opposed to 45% of Millennials, according to the survey.
BlackRock is also throwing its weight behind efforts which support diversity including sponsoring industry events such as the Barron’s Top Women Advisors conference and InvestmentNews’ Women to Watch Awards Luncheon held earlier this month. “These are our best clients that are being recognized by other industry publications,” she said. “We want to have BlackRock viewed as a supporter of theirs.”
At its own conferences, BlackRock also hosts sessions focusing on women’s issues. For example, BlackRock recently held a day-long investment forum for female advisers which included educational content on how to best cater to women.
Fagan noted BlackRock’s internal programs are also used to attract women to the firm. For example, a video about the firm’s Women’s Initiative Network, which allows for networking among women within BlackRock, is hoisted on its careers page. Details about BlackRock’s Families at BlackRock Network, which also fosters networking as well as discussion about work and family life balance, is displayed prominently.
Attracting women to its stable is key to retaining and attracting clients, Fagan noted. “When you go in to meet with a client or a prospect and it’s an endowment or a foundation, the board that you’re meeting with is representative of very diverse people with various backgrounds,” she said. “If we walk in as a firm with people that all look the same, it’s very difficult for us to demonstrate our commitment to diversity of opinion and thought leadership and perspective.”
She added diversity also leads to better performance. “When you have diversity in any organization, you bring together people with different perspectives,” she said. “That gives you additional dimensions to create potentially an investment edge, a sales edge, whatever the group is that you’re working within, diversity of perspective has been proven to give groups an advantage.”