Wealthy female Asian investors have different investment attitudes and preferences than their male peers, including being willing to invest more into funds and insurance products while having long-term financial goals.
This perceived difference, combined with the rise in the number of rich women in the region, is leading more firms to weigh the means of best offering them wealth management advice, although some experts believe it will take time before most other private banks follow suit.
On Monday (November 13), UBS announced the launch of UBS Unique in Hong Kong, which claims to tailor wealth management approaches to female client preferences. Marina Lui, regional market manager for China international, and head of UBS Unique, told AsianInvestor the initiative was based on studies that show female and male clients prefer different advice from their private bankers.
Other wealth management firms are also eyeing the difference between the sexes. Gina Heng, founder of Miss Kaya, an upcoming Singapore-based robo-adviser focused on women investors, said women tend to be more focused on hitting certain return targets.
“I believe for women it will be more about achieving goal-oriented investment targets than investing in any specific product category per se, be that mutual funds, simple structured products, or trading securities," she told AsianInvestor.
The robo-adviser, which in the development stage, is aiming for a 2018 launch.
Studies by UBS and other wealth managers and advisers suggest a number of differences in the way wealthy female individuals invest versus their male counterparts, in Asia and elsewhere.
For a start, women are typically more open to investing in funds and insurance products while having long-term financial goals, while tending to assume relatively less risk, partly because they are not very confident of their investing skills, Lui said. They also tend not to to leverage their investments, and prefer investment funds and structured products for longer term, while men prefer to trade frequently.
“They are relatively more disciplined and invest according to a pre-determined plan. They are typically not opportunistic," said Lui.
However, the desire for a more conservative approach continues with life insurance, which holds greater appeal among security-minded female clients: "Ten percent of our female clients in Greater China invest in life insurance, while only 5% of our male clients do the same,” Lui said.
Despite the difference in approach, not everybody subscribes to the view that the two sexes need to receive distinctly separate investment product offerings or advice. UBS, for example, isn't planning to offer different investment products to each gender.
“I don’t think it’s about male versus female; instead, it’s about finding the right fit for someone’s personality and personal planning needs,” Jessica Cutrera, founding partner at The Capital Company, an independent asset management firm, told AsianInvestor.
She acknowledges, however, that wealth firms must provide a comprehensive array of products and services to meet the needs of a diverse client base, including planning for changing family situations, such as child caring for a parent or a recently divorced individual who is planning for themselves for the first time.
“These scenarios are not unique to women, but are challenges more commonly faced by women,” she said. However, wealth firms can benefit by having team members and service offerings designed to cater to these needs, Cutrera added.
Vincent Magnenat, chief executive officer for Asia Pacific at Lombard Odier, believes women shouldn’t be stereotyped, and argues that women ultimately want the same investment results as men.
“That said, we do believe that there are ways we can serve women (and men) better, depending on their needs at particular junctures in their lives,” he told AsianInvestor.
UBS's latest report did not provide any details of portfolio performances. "We do not compare pure investment results between men and women as their financial goals are different to begin with," said Lui.
However a whitepaper by the Swiss private bank's chief investment office on women and investing in October 2017 noted that women typically prefer investing into companies that have a meaning and purpose for them. They are also inclined invest in businesses with diverse leadership, it added.
Force to reckon with
One reason for the increasing focus on female wealthy investors is the fact that they constitute a larger segment of regional riches.
BCG's Global Wealth Report 2016 noted that women held 30% of global private wealth in 2015. And the number of female billionaires in Asia has climbed from just three in 2005 to 25 in 2014, according to the UBS and PwC Billionaires Report 2015.
Forbes' 2017 list of self-made female billionaires placed the richest woman in the world in Asia: tech entrepreneur Zhou Qunfei, with an estimated net worth of $7.4 billion.
In Hong Kong itself, the top 50 rich list released in 2017 includes notable women such as Kingston Financial Services founder Pollyanna Chu and property tycoon Rita Tong Liu, according to Forbes.
Nikhil Dama, manager with wealth industry consultancy Scorpio Partnership in Singapore, noted that while most of the industry accepts the idea that female and male investors have different needs, most private banks in Asia are most focused on generating business volumes, and keeping costs down amid a time of increasing regulation.
In addition, there is a shortage of talented relationship managers, even as the wealthy population continues to expand in the region.
“When there are too many clients to manage, a relationship manager may be unable to completely understand clients on a one-on-one basis and there is a danger that the client experience falls below expectations,” said Dama.
Yet with the emergence of wealthy female clients, who think of wealth differently and have different investment goals, it could become even more challenging for the industry to provide the right client experience, she added.