According to Boston Consulting Group, women currently control a third of the world’s wealth and are adding US$5 trillion to the global pool every year. This far exceeds the growth of the broader wealth market. The burgeoning women’s wealth management scene is particularly evident in Asia-Pacific (APAC) – where women in Asia (excluding Japan) currently have a 32% (US$ trillion) share of the total regional wealth pool and a 10.4% annual growth rate.
The sector is however, often overlooked and characterized by traditional roots. This report seeks to champion the evolution of the industry’s approach to women, understand their uniqueness and motivations, celebrate their successes, and empower females to redefine their future through wealth protection.
APAC has the second highest rate of female-owned businesses in the world (9.1%), significantly ahead of North America (5.7%) and Europe (5.3%). China further dominates the world of self-made female billionaires, contributing 61% of the global total. Additionally, women’s workforce participation across Asia-Pacific tops globally (around 60% in Singapore and China) and the region’s economic dynamism is reflected in women’s growing earning power.
Crediting these numbers to several possible factors, some of the interviewees shared their view on why they think women in Asia-Pacific may be better placed to engage in wealth management than their compatriots globally. Factors cited include having a widespread workplace culture of diversity and inclusivity, and women’s stronger interest in success and wealth, especially in China.
The report states that these factors, along with “pink tax” that sees females pay more than men for comparable goods worldwide (generally over 40%), have spurred a need in women to close the wealth gap to sustain their desirable lifestyles.
A broad spectrum of financial personalities and risk tolerances exist amongst women. Contributors to the report frequently highlighted how finance professionals working in international hubs and entrepreneurs running their businesses tend to have a higher risk threshold, with the remainder being more reluctant to invest. Convincing the overly cautious of the need to assume more investment risk may well be one of the most invaluable services the sector can perform.
Wealth managers can champion a goals-based wealth management paradigm – as compared to a transactional one – to empower women to take more control of their wealth. This would encourage female clients to engage in robust wealth diversification – a practice that is currently lacking in the segment.
The report also found that women place a stronger emphasis on authenticity and relationships than their male counterparts, and value partners who truly understand their needs.
Environmental, Social, or Governance (ESG) themes accumulated US$20.6 billion in new money in 2019, making it a record year. While more nascent, impact investing has become a global force too – with 1,340 organizations estimated to have managed US$502 billion in impact investing assets worldwide.
Covid-19 will further fuel this explosive growth, with the crisis exposing flaws in healthcare, structural social inequality, and the global economy's fragility. The survey's contributors noted that ESG principles tend to resonate very strongly with women, which can only be bolstered by the sector’s strong performance during the crisis and emerging “safe haven” status (April 2020 from Refinitiv Lipper showed the average performance of ESG equity funds outstripping conventional ones +0.43% to -0.65%). Female investors within the APAC region appeared to display greater confidence in ESG investing, presenting opportunities for wealth managers to become an influential force for good.
“With women gradually occupying a significant portion in the wealth management industry, it remains extremely critical to understand the motivations and values of female clients. Alongside VP Bank’s investment philosophy “Investing for Change”, this report supports our commitment towards our stakeholders to create a more equitable future,” said Reto Marx, Head of Intermediaries and Private Banking, VP Bank Ltd Singapore Branch.
Madame Wang Dian, CEO of Hywin Wealth, added, “Hywin Wealth believes in supporting Asian women in our community – celebrating their successes and standing alongside them in every step of their journey. Through this report, we hope to communicate the pressing needs of this particular segment and revolutionize the way the industry thinks about its current and future clients.”
In July 2019, VP Bank AG signed a memorandum of understanding for a partnership with Hywin Wealth Management Co Ltd. This offers us the opportunity to build up our business activities in the Chinese market and advance our Asia strategy together with a highly professional and reputable partner.
For more information on the report, please refer to the following link here