According to a survey by Euromoney, 66 per cent of private banks are looking to recruit more women. With the Middle East booming and the wealth management industry growing fast, more women in the region are getting into the lucrative private banking sector.
This will have significant benefits for private banks, their clients and society as a whole.
Increasing women’s wealth
Globally, women are expected to control over 34 per cent of the world’s wealth this year, according to research by Boston Consulting Group (BCG), adding $5 trillion to the global wealth pool; and women’s wealth is outpacing overall growth. The Middle East is no exception. In the UAE alone, women are projected to control assets worth $140 billion by year end.
This reflects a broader story of female empowerment across the region. Women outnumber men at university in 15 of 22 Arab countries. And women increasingly lead major organisations in the region. such as First Abu Dhabi Bank, the Saudi Tadawul Group, Arab Bank and Morocco’s Capital Market Authority.
According to Accenture, there is evidence that globally women are likely to become the major beneficiaries of the largest inter-generational wealth transfer in history in the next 25 years as many women outlive husbands and daughters receive more inheritance.
Attitudes to wealth management
As wealth increases, evidence suggests women want an advisory style that works for them. According to WealthiHer, a network for ultra-high networth women, nearly 75 per cent of women believe men have different investment attitudes and styles, and they prefer to have more information before making investment decisions. BCG also found that 64 per cent of female investors take ESG factors into account in their investment decisions.
Women face specific wealth challenges. They have a longer life expectancy and are more likely to have career breaks. Their earnings are likely to peak in their 40s (men’s peak in their 50s), meaning there is a relatively short timeframe for women to save. These factors can impact women’s wealth, ability to achieve financial goals and leads to a potential pensions gap.
Research from Accenture also shows women tend to be more conservative long-term investors than men, their goals focussed on safe-keeping and saving for the long-term. In fact, this may be why investments held by women tend to perform better. A study by Warwick Business School shows women’s returns are nearly two percentage points higher than men’s.
Women wealth managers
According to an Insured Retirement Institute study, 70 per cent of women prefer to work with a female financial advisor. With fast-growing female wealth, this puts female wealth managers at the centre of the private banking industry in the future.
Yet, it is important to emphasise female wealth managers are not hired only to serve female clients. All clients can benefit from increasing numbers of female wealth managers. There is strong evidence that women are able to synthesise complex financial data and develop creative solutions to meet clients’ exacting needs. Women also score better than men on emotional intelligence, an invaluable skill when dealing with clients facing significant challenges in their lives and finances.
Despite the growing number of women in private banking, BCG suggests that only 22 per cent of senior management roles are held by women. However, this is changing, as more women achieve leadership positions in the industry.
Now many employers offer greater flexibility. A McKinsey 2022 survey shows that private banks plan to triple their investment in technology in response to remote working and clients’ needs. In addition, many private banks are supporting female employees through leadership development programmes; and offer career comeback programmes for those who have taken a career break.
All clients, whatever their gender, are set to benefit from the influx of women into the private banking industry. The importance of both strong technical knowledge and relationship building skills make wealth management an excellent career for talented women.
The rise of female wealth managers in the Middle East looks set to pay dividends for the region’s clients, wealth management firms and wider society.
