The UK is one of the few European markets in which women are a major segment, says GlobalData, a leading data and analytics company. According to the company almost 15% of UK HNW investors in 2018 are women, accounting for roughly 50,000 individuals. This equates to more female millionaires than in all the nations of Central and Eastern Europe combined. It represents a sizeable and growing opportunity for the wealth management industry to target, in what is currently a poorly served segment.
The company’s latest report, ‘Wealth in the UK: HNW Investors 2018’, reveals that while it is already a mature wealth market, the UK still offers room for growth. As the intergenerational wealth transfer is looming, provision of inheritance and tax planning services does not match demand.
While this opportunity is not limited to the female HNW segment, propositions targeted at wealthy women can prove to be a competitive advantage. So far, globally the industry is as a whole has failed to connect with women. In the UK specifically, this is complicated by the fact that many wealthy women are busy executives, either as entrepreneurs or high-flying employees.
Time constraints are a key problem for this demographic – something they share in common with their male colleagues as a motivator for seeking out professional advice. However, whereas British men can rely upon their wealth managers understanding their needs to build up trust and facilitate a convenient relationship, wealthy women do not have that luxury.
Bartosz Golba, Head of Content, Wealth Management at GlobalData commented, ‘‘Wealth managers that can connect with female investors on concerns such as dependents, financial health, and risk management will have a competitive edge in this large and growing segment.’’
Being able to differentiate from other providers in the UK’s well-developed wealth management market is key. 55% of wealth managers surveyed by GlobalData agree that intergenerational transfers will be a big source of new business in the coming years. Hence inheritance planning will continue to be of importance, but competitors can stand out from the crowd by adding tax advice to the mix.
Golba concluded: ‘‘The industry also has to consider alternatives for discretionary asset management services traditionally favoured by HNW clients. Demand is increasing for both advisory mandates and automated solutions like robo-advisors – and UK wealth managers are worried. Those that can adapt to a hybrid model will gain market share.
‘‘In addition to those discussed above, emphasis on brand building and a more selective asset allocation strategy are critical success factors in the UK wealth industry – all of which we explore in detail in the report.’’