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Tailor for women

A recent Good Housekeeping survey revealed that a disturbing 90 per cent of women show distrust in financial institutions. Fifty-five per cent felt “these companies are run by men in suits who do not have women&#39s best interests at heart”.

IFAs, product providers and their communication agencies are going wrong somewhere by not fully understanding one of the fastest growing business sectors in the UK.

Women prefer different distribution channels to men and spread their business between fewer suppliers. They are less likely to have switched suppliers or be planning to do so. The high-street banks and, to a lesser degree, mortgage providers are their favoured suppiers. However, if an IFA&#39s approach leads to a meeting, they could not be better equipped to meet the stated preferences of most women.

The opportunities are spelt out in an FSA publication, Women and personal finance: the reality of the gender gap. It says: “Women&#39s preference for more traditional face-to-face transactions is likely to be related to the fact that they have been found to be less impulsive consumers of financial products, less embarrassed to ask questions and less likely to trust their own judgement than men. A face-to-face discussion about a financial product or service is, therefore, more likely to fulfil their needs than remote purchase channels.”

Yet, observing that, despite the “exceptions, in particular women IFAs who specifically target better-off women with services tailored to their needs”, the FSA found little evidence to suggest the financial services sector is targeting women.

When there are 30,000 products and thousands of mailshots being sent out, this seems surprising. We have known for years that women over 50 are by far the most generous donors to charities. Is it not worth checking, then, to see if women would be more prepared to buy ethical unit trusts?

Targeting women&#39s distinct financial needs is only possible if an IFA&#39s database has kept pace. It is no use creating a compelling mailshot for women if we have to pull it at the last moment because we are not 100 per cent sure of the sex of the customer.

Building societies were uniquely placed to develop a long-term relationship with the provision of mortgages. No product can rival the emotional impact of providing the very roof over the customer&#39s head for 25 years. Yet what did building societies learn about their customers as they aged from 25 to 50, had a couple of kids and doubled or trebled their income? Too often they knew their payment records and nothing else.

Research has shown that men are much more likely to make decisions based on product characteristics and price, whereas having an existing relationship with an institution is the most important factor in women&#39s decision-making. How does our industry cultivate that loyalty?

If women are telling us that an existing relationship comes before colourful literature, we see little sign from financial services that this has sunk in. Has the industry become such a massive sender of direct mail that it has forgotten how real people speak to each other?

Part of the problem lies with their agencies. A letter is not regarded as important. The leaflet takes priority. How can they forget that people read the letter first? No wonder there is no distinctive tone. No wonder the women in Good Housekeeping&#39s survey suspected the companies were run by “men in suits”. We are lucky they did not say robots.

IFAs wanting to avoid the trap of sending letters to all and sundry which speak to no one in particular should read them out loud. With luck you will fall about with laughter before you send them out.

The purchase of financial products is closely correlated with income. The proportion of economically active women is converging with that of men. Half the newly qualified doctors, dentists, business students and financial whiz kids are women and they will be relatively highly paid.

Where, in uncertain times, could one find better growth prospects? They will be empowered by internet search engines, more thoroughly prepared and, perhaps, more loyal. Could the problem be the products themselves or their presentation? The creation of more flexible products delivers convenience but communication of this generally lags well behind.

The industry is in a schizophrenic state. It talks about one-to-one marketing and sends out mass mailings. We want relationships but talk like high-pressure salesmen to our “valued customers”. There are subtle differences between women and men in respect of financial services and those who pay more attention to them will be rewarded.


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