THE FUTURE IS FEMALE FOR UBS

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UBS has spotted a significant opportunity with wealthy women and is hoping its five year plan – to develop and scale its expertise – will help it better serve and win new business from this segment.

Building on existing programmes, such as the Women’s Symposium and the latest marketing collaboration with the globally renowned photographer Annie Leibovitz – UBS is keen to recast its image and reframe the dialogue.

The size of the female wealth market is expected to rise from USD13 trillion to USD18 trillion over the next five years – a 6.7% CAGR jump, greater than the GDP growth of China and India combined for the same period – cementing the segment as the next growth frontier for UBS.

As it stands, women own approximately 30% of the assets UBS currently advises on. However, with private wealth controlled by women growing 1.6% faster than men’s – the wealth manager hopes to grow this share of the pie.

At the front of this strong growth, are female business owners. As CEO Sergio Ermotti describes “… in China, they had 45 billionaires in 1995. Right now there are 145, and 50% of them are self-made women. This is the right thing for us.” HSBC’s Essence of Enterprise research validates that there are just as many female entrepreneurs under the age of 35 as there are men, making pursuit of this segment highly relevant.

While it’s encouraging to see organisations such as UBS begin to target women more specifically, the industry as a whole needs to be more conscious of how it frames its approach. UBS’s strategy for targeting a female audience includes activities such as (re)training its advisors to better communicate with women, use more engaging and jargon-free language, and encourage a more proactive management of their wealth.

“[Women] are very busy — they are tackling a career and raising a family and children, so the [wealth manager] needs to be mindful that they’re very pressed for time,” says Olga Miller, MD at UBS Wealth Management.

“[We need to empower] women to deal with harder financial questions, [boosting their confidence to] encourage financial dialogue early on to get them accustomed to dealing with finances”.

This language is not quite aligned to the savvy female entrepreneur at the heart of UBS’s growth objectives.

Our research with SEI demonstrates that women are actually highly in tune with their financial needs, and are more likely to believe that formulating a strategy and sticking to it is a good approach to managing wealth. In spite of this, just a quarter of them currently have a plan in place, indicating that they have not yet found advice which they believe is fully relevant to their requirements.

This is where UBS is starting to progress the debate. When it comes to investing, women are more likely to focus on products that bring about social good and help achieve positive social change. Over the next five years, UBS estimates women will invest around USD2.3 trillion in ethical causes so the societal and economic benefits of pursuing a female-focused strategy are not insignificant.

As such, the wealth manager is said to be “forming a view” on whether it is necessary to also launch new investment products to reflect women’s interest in ethical investing.

Commitment to women may be a no-brainer to the likes of UBS, and the behemoth wealth manager has certainly proved time and again it’s got a keen eye for growth. But in order to genuinely appeal to the women who are driving the growth, it will need to focus more resoundingly on their future aspirations.

News from the world of wealth:

Banks study loopholes to enable UK branches to sell to EU clients – FT

Neil Woodford to launch Income Focus fund – CityWire

TD Ameritrade Institutional gives advisors digital tools – FinExtra

Julius Baer to take over Swiss wealth manager Wergen & Partner Vermogensverwaltungs  – PBI

Swiss fine Coutts over 1MDB money-laundering breaches – Bloomberg

Thought of the week:
“A woman is like a tea bag; you can’t tell how strong it is until it’s in hot water.” – Eleanor Roosevelt

Hubert Brown Scorpio PartnershipAuthor: Hubert Brown, Manager at Scorpio Partnership.

Expertise: Hubert divides his time between the analytical side of projects and HNW insight work. Recently, he has been actively involved with the creation of Scorpio’s Wealth Management M&A Deal Tracker.

Background: Hubert holds a Bachelor’s degree from the University of Leeds in Business and Financial Economics. He has experienced and enjoyed a breadth of client project work since joining two years ago.

Cover photo from Uncalno, used under creative commons license.

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