This blog post will examine some financial services (FinServ) that are marketed towards women in hopes of encouraging financial literacy among females (especially millennials like myself), as well as spreading the word on the financial resources available many women may not know about.

Fantastic Female Financiers

About 100 years before Leonardo DiCaprio made Jordan Belfort’s The Wolf of Wall Street a household nickname, a similar sort of money-hungry character roamed the streets of New York City; only this was a woman, and she was nicknamed “The Witch of Wall Street.”  The “witch” in question was Hetty Green, and she is famed as being the richest woman in America at the turn of the 20th century.

Hetty Green
Hetty Green

Hetty was a financier. She oversaw tremendous real estate deals, bought and sold railroads, and made loans. She was particularly adept at prospering during the downfall of others; buying falling stocks, foreclosing properties, and even holding entire banks, entire cities, at her mercy through enormous loans.”

Hetty’s fortune amassed over $3.8 billion in today’s currency. Hetty, who was famed for her legendary stinginess (she instructed her laundress to only wash the hems of her dress in order to save money on soap) and status as the only woman in Wall Street, earned her the ominous nickname, “The Witch of Wall Street.”

Hetty lived over 100 years ago, yet she faced challenges that continue to face women in the financial world today. For example, in 1885, Hetty realized that a financial firm had “surreptitiously used her wealth as the basis for their loans to Edward,” her husband. As a reaction, Hetty emphasized that she and her husband’s finances were separate and withdrew her securities from the firm.

Like Hetty, many women today are not expected to be or instructed on how to be financially literate; and as a result, are relying on their husbands to make financial decisions. A 2013 survey by TIAA-CREF found that women increasingly rely on friends and family for financial advice, despite the fact that women increasingly assume the breadwinner role in the household.

Hilary Martin, a financial advisor and strategist with San Jose, California-based Family Wealth Consultants, Inc., expresses her sentiments regarding women’s place in the financial industry.

“Wall Street is largely male-dominated, and much of the language we use about money is very ego-based and women don’t relate well to it. Traditionally, women haven’t taken an active role in their investments and financial planning. That fact is changing, but the truth is that it is changing slowly.”

The fact that women are beginning to take on a more active role in their finances is evidenced by 15-year-old Natalie Clarke, who owns 5,000 Bank of America shares, which were given to her when she was a baby. Clarke is very attentive to her finances, despite being a high school student; she attends annual Bank of America meetings in order to stay up-to-date on what the bank is doing to raise its share price as well as look into whether her shares can help her pay for college. She even looks to see how women’s salaries at the company compare with men’s salaries.

Natalie Clarke
Natalie Clarke

If there is one thing we can learn from Hetty Green and Natalie Clarke, it is that women who lived 100 years ago, just like the women who are growing up in today’s world, are capable of being proactive in handling their own finances. However, the reality is, there is an investment gap between men and women. There are many reasons as to why this could be. Perhaps there is some truth to Hilary Martin’s theory that “Banks, brokerages and other related firms don’t treat women with respect.” Or, perhaps it is based on anxieties surrounding risk. According to Marina Gerner, writer for the Money Observer,

“Women are more risk-averse than men, and investing is a risky business. Many studies support this idea. Only 9.3 per cent of women are willing to take financial risks, compared with 20.4 per cent of men, according to TD Direct Investing’s research.”

In reality, the reasoning behind the investment gap is probably much more nuanced, but regardless of why, the fact remains that “about 80% of women do not have an investment portfolio, compared with 66% of men, according to research by TD Direct Investing.”

Given these statistics, there is a niche market developing: financial services directed towards women.

FinServ: How Women Perceive it

One truth about the financial industry that many people do not realize is that, according to the Federal Reserve, women control 51.3 percent of all wealth in the United States. By 2020 that number is projected to grow to two-thirds. It is clear, then, that women have their foot in the door when it comes to accruing wealth; so why is the financial industry not reflecting that they manage it?

According to a BCG survey, 73% of women said they are “most dissatisfied” with the financial services industry. This dissatisfaction is important, as it introduces a new market for financial institutions which are garnered towards women. These services hope to eliminate the “condescending manner, poor or contradictory advice, and worse terms and deals than men” that they receive in the financial services industry.

It is important to take note of the financial institutions which are focused on specifically helping women. Ignoring the female economy is dangerous. According to a 2009 article by the Harvard Business Review, women now drive the world economy.  Authors Michael J. Silverstein and Kate Sayre express:

“Globally, [women] control about $20 trillion in annual consumer spending, and that figure could climb as high as $28 trillion in the next five years. Their $13 trillion in total yearly earnings could reach $18 trillion in the same period. In aggregate, women represent a growth market bigger than China and India combined—more than twice as big, in fact. Given those numbers, it would be foolish to ignore or underestimate the female consumer. And yet many companies do just that, even ones that are confident they have a winning strategy when it comes to women.”

The industry is reacting to the influx of the female economy, although the steps that have been taken are still relatively small. The next section of this article will take a look at the online resources women have available to them, which help them to manage their wealth responsibly.

Resources for Women

Robo-advisors are one of the hottest financial trends of the decade. Low-cost automated online investment advice is changing the way individuals handle their money. Recently, there have emerged a couple of robo-advisors who are directing their products and services towards women.

She-Capital

SheCapital is a robo-advisor powered by technology advisor JemStep, and encourages financial literacy among women. The content and advice on this platform is written by women, for women, and goes one step further in their efforts to help females by donating 10% of the company’s profits to the charity She’s the First, a nonprofit for girls’ education. The platform itself is pretty typical of a robo-advice website. Screen Shot 2016-04-28 at 3.13.03 PM

What is so different about female-focused robo-advice platforms compared to others?

According to Deborah Fox, founder of Fox Investment Planning, women do see their investments differently than men. “According to an InvestmentNews study, 84.7% of adviser respondents said that their female clients are more focused on long-term planning than on short-term rates of return, compared with their male clients. And 74.2% of advisers said that their female clients are more conservative about making investment decisions than their male counterparts, too.”

Screen Shot 2016-04-28 at 3.13.08 PM

Ellevest

Ellevest is another robo-advice platform marketed towards women, only this platform evidences its female focus through aesthetic choices; the design of the website features a more feminine and sophisticated font, design, and layout. Visually, it is more obvious that this website is focused on women. This platform was launched by chairwoman of Pax Ellevate Management and Ellevate Network, Sallie Krawcheck, who claims that the female robo-advisor is “more than a niche — it is a movement.”

Screen Shot 2016-04-28 at 3.47.52 PM

Krawcheck acknowledges that a successful female robo-advice platform is going to be more than simply appealing presentation. Instead, the appeal lies in the positioning of the advice itself, which she says will appeal more towards women than men. Krawcheck is looking to the future with her platform. “One audience with potential would be students, since many prefer passive learning and are quick to pick up digital interfaces.” Screen Shot 2016-04-28 at 3.48.14 PM

The ModernAdvisor’s eBook: Women & Money

This eBook, published by the Canadian online-advice platform Modern Advisor, is authored by female financial advisors and is directed towards women. The eBook, which can be downloaded for free here, offers advice for women such as how to negotiate salaries, knowing your worth, and how to diversify your income. This eBook helps women learn how to manage money and plan for their financial futures.

Screen Shot 2016-04-28 at 3.11.34 PM

The eBook also provides reasons as to why it is important for women to have financial resources. Firstly, women tend to live longer on average, meaning they have more years of retirement to plan and save for. Women also are more likely to suffer financially after the death of a spouse or a loved one. Finally, women tend to earn less money and save less money than their male counterparts. eBooks such as this are great resources for women who want to be less reliant on others for financial advice – and best of all, it’s free!

Women on Social Media

The following Twitter accounts are excellent resources available for connecting with like-minded women who are seeking financial advice or want to offer up some of their own.

Women in ETFs

Women in ETFs
Women in ETFs

Women in Finance 

Women in Finance
Women in Finance

Women Advisors Forum

Women Advisors Forum
Women Advisors Forum

Ellevate Network

Ellevate Network
Ellevate Network

Savvy Woman

Savvy Woman
Savvy Woman

We here at Kurtosys think it is incredibly important for men and women to practice financial literacy so that they can invest in a secure future. Your investors matter!

If you think there are any female-focused financial services worth mentioning that we left out, feel free to comment below or Tweet us at @Kurtosys – we would love to hear feedback from our female visitors.

Sarah Mardiney
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Sarah Mardiney

Digital Engagement Intern at Kurtosys
Sarah is studying Media, Culture, & Communications at NYU. Some of her hobbies include arguing about films, watercolor painting, and taking sneaky pictures of dogs.
Sarah Mardiney
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