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Women’s Economic Power Is Expanding – Is Investment Management Keeping Pace?

Women are transforming the global economy. The financial services industry must evolve both to better serve women investors, and to assess the impact that women’s decisions have on markets worldwide – now and in the decades to come.

Women are transforming the global economy. The financial services industry must evolve both to better serve women investors, and to assess the impact that women’s decisions have on markets worldwide – now and in the decades to come.

Women represent an increasing economic power in the U.S. and around the globe. American women account for 47% of the U.S. labor force and are responsible for starting 41% of new businesses.1, 2 And as business leaders, women make a difference: A 2018 McKinsey study found companies with the most gender-diverse executive teams were more likely to have above-average profitability than the least diverse companies by 21%.3

For the first time, American women have surpassed men in controlling private wealth, giving them decision-making power over approximately $14 trillion.4 On a larger scale, as of 2017, women held 30% of the world’s wealth (approximately $60 trillion), and estimates call for that amount to reach $72 trillion by 2020.2

Empowering women

But the financial industry has not been as quick to respond to this demographic shift as many of us would hope. Women’s perspectives are essential: There’s opportunity for greater gender diversity in industry leadership, on trade floors and in management roles. More women could represent and make decisions about the trillions of dollars in client assets our industry manages daily.

Like many investment management firms, PIMCO advocates for gender equality in our industry and across the broader economy, partnering with influential organizations such as Girls Who Invest and The 30% Club to bring more women into portfolio management roles. Our CEO, Manny Roman, also recently signed the UN’s Women’s Empowerment Principles, underscoring PIMCO’s commitment to equality around the world.

Women as investors

When I started in the financial services industry more than two decades ago, I worked on a groundbreaking research initiative aimed at helping women get more engaged in investing. At the time, demographic factors pointed to the need for women to become more active investors; today the demographics reveal women’s vast financial power. The groundswell of focus across the investment management industry to better serve this broad set of engaged investors is gratifying, but it also underscores the importance of the industry flexing to meet women, instead of the other way around.

While women have greater understanding today of the importance of investing in helping them reach their goals, our industry still has work to do to understand the wide-reaching impact of this powerful cohort of investors. PIMCO is committed to a research-oriented approach to understanding and meeting women’s evolving investment needs. Rigorous research is crucial to PIMCO’s investment process, helping us identify and act on major global trends affecting the economy and markets over the long term. The insights we gain from our in-depth study of women investors can help our industry navigate change and better serve all our clients.

The pursuit of wealth-life balance

With women directing increasing wealth, it is important for the individuals and the firms that will manage their investments to understand women’s objectives, challenges and expectations. We recently commissioned a large-scale survey on women’s views of investing, including their goals, performance expectations and investment philosophy. We learned that many women see wealth as one component of a balanced, holistic life: the pursuit of wealth, alone, is not enough.

We began our research by hosting small discussion groups, encouraging the participants to share their unvarnished impressions of investing. These focus groups highlighted how the financial industry’s traditional framework for helping individuals manage their assets isn’t working for many women. Specifically, we heard this feedback:

  • The financial industry is set up to be complicated and uncomfortable for women.
  • Women want power and control over their finances, but they are happy to delegate to quality partners – advisors and managers who share their values and employ a transparent, straightforward approach.
  • Advisors assume all investors have a long-term investment horizon, but women’s lives and investment goals are more complicated and immediate.
  • Performance is more qualitative than quantitative.

Transforming insights into actions

These initial findings confirmed for us that women are a catalyst of change and opportunity – redefining the rules and setting new expectations for our industry. And the great news is that the industry has an opportunity to respond – and empower women to find wealth-life balance. The survey we launched following these meetings was designed to gather specific data around how financial services and asset management needs to evolve to attract, retain and better serve women investors, including specific guidance on strategies and product solutions.

In the months to come, we will share further insights, tools and resources to educate ourselves and our industry on how to take action and better serve women investors. It’s an exciting journey.

Learn more  about PIMCO’s commitment to gender equality and register to be notified when we publish our research and key findings on women, investing and the wealth-life balance.

READ HERE

1 Source: Pew Research Center study on gender gains and gaps, 15 March 2018

2 Source: Boston Consulting Group Global Wealth Market Database 2017. 2017 U.S. wealth = $86.1 trillion (40% of global personal growth), 55% of which is investable assets. 2017 global wealth is $201.9 trillion, 60% investable assets.

3 Vivian Hunt, Sara Prince, Sundiatu Dixon-Fyle and Lareina Yee, “Delivering through Diversity,” McKinsey & Company, January 2018

4 Source: Cerulli Associates

The Author

Cathy Stahl

Global Head of Marketing

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London
PIMCO Europe Ltd
11 Baker Street
London W1U 3AH, England
+44 (0) 20 3640 1000

Dublin
PIMCO Europe GmbH Irish Branch,
PIMCO Global Advisors (Ireland)
Limited
3rd Floor, Harcourt Building 57B Harcourt Street
Dublin D02 F721, Ireland
+353 (0) 1592 2000

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PIMCO Europe GmbH
Seidlstraße 24-24a
80335 Munich, Germany
+49 (0) 89 26209 6000

Milan
PIMCO Europe GmbH - Italy
Corso Matteotti 8
20121 Milan, Italy
+39 02 9475 5400

Zurich
PIMCO (Schweiz) GmbH
Brandschenkestrasse 41
8002 Zurich, Switzerland
Tel: + 41 44 512 49 10

PIMCO Europe Ltd (Company No. 2604517) is authorised and regulated by the Financial Conduct Authority (12 Endeavour Square, London E20 1JN) in the UK. The services provided by PIMCO Europe Ltd are not available to retail investors, who should not rely on this communication but contact their financial adviser. PIMCO Europe GmbH (Company No. 192083, Seidlstr. 24-24a, 80335 Munich, Germany), PIMCO Europe GmbH Italian Branch (Company No. 10005170963), PIMCO Europe GmbH Irish Branch (Company No. 909462), PIMCO Europe GmbH UK Branch (Company No. BR022803) and PIMCO Europe GmbH Spanish Branch (N.I.F. W2765338E) are authorised and regulated by the German Federal Financial Supervisory Authority (BaFin) (Marie- Curie-Str. 24-28, 60439 Frankfurt am Main) in Germany in accordance with Section 32 of the German Banking Act (KWG). The Italian Branch, Irish Branch, UK Branch and Spanish Branch are additionally supervised by: (1) Italian Branch: the Commissione Nazionale per le Società e la Borsa (CONSOB) in accordance with Article 27 of the Italian Consolidated Financial Act; (2) Irish Branch: the Central Bank of Ireland in accordance with Regulation 43 of the European Union (Markets in Financial Instruments) Regulations 2017, as amended; (3) UK Branch: the Financial Conduct Authority; and (4) Spanish Branch: the Comisión Nacional del Mercado de Valores (CNMV) in accordance with obligations stipulated in articles 168 and 203 to 224, as well as obligations contained in Tile V, Section I of the Law on the Securities Market (LSM) and in articles 111, 114 and 117 of Royal Decree 217/2008, respectively. The services provided by PIMCO Europe GmbH are available only to professional clients as defined in Section 67 para. 2 German Securities Trading Act (WpHG). They are not available to individual investors, who should not rely on this communication.| PIMCO (Schweiz) GmbH (registered in Switzerland, Company No. CH-020.4.038.582-2) . The services provided by PIMCO (Schweiz) GmbH are not available to retail investors, who should not rely on this communication but contact their financial adviser.

The survey results contain the opinions of the respondents and not necessarily those of PIMCO. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. This material is intended for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product.

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