Thu May 22, 2014
In Charge Of Nearly $20 Trillion, Are Women The New Global Players?
MICHEL MARTIN, HOST:
I'm Michel Martin, and this is TELL ME MORE from NPR News. Now we'd like to talk about an overlooked economic force. We are talking about women. In recent years, a lot of advocates and activists have talked about the global economic importance of educating girls and women. But there's an aspect of this that seems to have been overlooked, and that is the financial education of women.
It turns out that women create and influence more than a quarter of the world's wealth - upwards of $20 trillion. In the U.S. alone, women hold decision-making power over more than $11 trillion dollars. And that represents a tremendous opportunity to influence the global economy and society - all this according to a new report titled "Harnessing The Power Of The Purse: Female Investors And Global Opportunities For Growth." It's by the nonprofit think tank - the Center for Talent Innovation. And the center's founding president Sylvia Ann Hewlett co-authored the report.
She was also part of TELL ME MORE's Women in Tech series in March. And she is with us now from London. Thank you so much for joining us once again.
SYLVIA ANN HEWLETT: It's great to be part of your show, Michel.
MARTIN: So what motivated this study?
HEWLETT: Really, market failure. Think of this - of the well-heeled women in the six countries that we look at - you know, the U.S., the U.K., India, China, Hong Kong and also Singapore - 53 percent of these women have no financial advisor because they really don't like what's on offer. They want to talk about how they align their financial resources with the meaning and purpose of their lives.
One of the most amazing interviews in this study is with a young woman called Fiona Kushek (ph) - one of these, you know, biometric entrepreneurs. She started a company when she was 32. She just sold it for 21 million pounds. And she went looking for advice because she had a very special set of dreams. She wanted to make a difference to women running startups in the biomedic sector.
So, you know, she went to the standard kind of financial advisor. He was very patronizing. He saw that she wasn't, as he put it, from money. And eventually she ended up with a woman advisor in a boutique firm who understood that this woman was very serious about, you know, putting her legacy out there.
MARTIN: Let me just unpack a little bit of these details here. You found that 53 percent of the women surveyed did not have financial advisors - and 75 percent of the American women under 40. And 67 percent of all of these women surveyed felt they were misunderstood by the financial advisors if they did have one. Did you notice any interesting country by country differences - and really differences in the ways women in different countries address the question of wealth?
HEWLETT: Absolutely. One amazing thing about the U.S. is that women who inherit wealth are incredible philanthropists. That's not so true in China. And that's a very important, you know, not detail but piece to grasp. Similarly, women in the U.K. are actually more confident as investors than U.S. women. And Chinese women are off the charts in terms of their confidence.
We find that there is a lot of traditional role-playing around money in the U.S. It's, I think, a product of the '50s. In China, you know, women controlled the silk trade all those years ago. The same is true of traders in Nigeria. They were always women. So there are parts of the world where women have always been much more comfortable controlling money and making those decisions. That is true, you know, in Heartland American. And again, that is a fascinating piece of this study.
MARTIN: If you're just joining us, we're talking about the way women create an inherit wealth. That's the focus of a new report called "Harnessing The Power Of The Purse." Our guest is co-author Sylvia Ann Hewlett.
This is not a small group of people. You found that 66 percent of the respondents identified as the financial decision-makers in their households. I think that many people would be surprised by that, if they are in fact the people making the financial decisions. Yet, the people who are supposed to be advising them, or at least are available for that purposes, don't - it sounds like they don't respect them.
HEWLETT: Right, and don't get it.
HEWLETT: We find, for instance, that there's a big dichotomy between the women who make their own money and the wives and the widows.
MARTIN: Oh, tell me about that.
HEWLETT: And the wealth creators, who are now the majority of women with affluence, really have a very different idea in terms of what they want to do with it. What we see distinguishes them from men in the same category is this link to their dreams, to their legacies, to the idea that they want to align their life goals with their financial assets. They like performance. They like to do well with their money. I mean, it's not that that is not important.
But they also want it to be a vehicle for, you know, meaning and purpose. In some cases, it is altruism. For instance. a lot of women are particularly interested in investing in companies that do very well on diversity, that have women in leadership. They want their values to be expressed in their investments. Others, for instance, have the dream of, you know, supporting girl power or startups. I mean, the dream can be different. Maybe someone has a passion for yoga and want to support, you know, that practice.
But whatever the dream is, it needs an expression in your portfolio. And we find in traditional financial services this is not understood. It's not delivered. And one of the magics of this study, we now know the behaviors, the approaches, the attitudes that women are looking for in their financial advisors.
MARTIN: Does the report speak to whether women are better serving other women? If women are the financial advisors, do they get it?
HEWLETT: Well-off women don't care too much whether it's the man or a woman who is actually the advisor. But they want the team to be gender balanced. They want the team and the set of offerings to be infused with what they call gender smarts - an understanding of the female marketplace.
MARTIN: You've interviewed so many people from so many different backgrounds, it just seems odd to me that an industry, which is supposedly data driven, right?...
MARTIN: ...Which is focused on customer needs...
MARTIN: ...Doesn't grasp that there are these sources of wealth out there and doesn't understand that women want to be heard when they talk. I just - can you explain that?
HEWLETT: I can. We're discovering that some of the major banking companies, for instance, use a questionnaire that was developed for the Marines to select financial advisors. It's also true that they market to wealthy women all the time. But I think at the back of their minds is this notion that it is the wives and the widows who are pretty passive.
So I think what women are yearning for is to be treated seriously, to be treated as professionals, as folks who have created wealth that don't need to be condescended to. They also want to be dealt with very efficiently because the last thing professional women have in their lives is a lot of spare time. And it's fascinating, you know, one of the focus groups we went around the table, and several of the very prominent women in the room did not have a financial advisor because, you know, they had felt that the value wasn't there.
MARTIN: May I ask if you have had this experience yourself in seeking financial advice, if it's OK that I ask that as an entrepreneur yourself?
HEWLETT: No, do. I mean...
MARTIN: Have you had that experience?
HEWLETT: I'm very glad you asked that. I felt a little bit like the poster child today because, you know, clearly, I have some assets. I also have a complicated life. I have five children. I have a big career. I have no time. But I definitely care about how my assets are allocated.
And I have tried two or three and gotten not very far. It's in very safe places. But last time I looked, for instance, I found that a bunch of the top picks were fast food and defense. Those are not places that I wanted my money to be invested in. So I do feel myself a little frustrated on this front.
MARTIN: What would improve this situation - different training in what we sometimes call emotional intelligence?
HEWLETT: You know, I think empathy - the ability to sit in someone else's shoes. All of this is incredibly important. But what we see at the core here is the yearning for a team of, you know, financial advisors who really do take the diversity of the marketplace these days very seriously and understand that all kinds of new players are driving value in this global economy. And a whole lot of them are not traditional white men.
MARTIN: Do you feel comfortable projecting forward that if women were to be more respected and more aware of their own financial influence globally, how it might change either the economy or our politics? I understand that's a very sort of vast question. I'm just curious if you have thoughts about that.
HEWLETT: Well, it's fascinating. For starters, it's a huge engine for growth. Right now, you know, a few trillion dollars are just sitting on the table - a whole lot of them being held in cash because there is no investment off these assets. So that's a bad idea for the global economy. But the other thing that's true, given the thought and the long-run legacy that women want to put into how they allocate their assets, one would think it would be a whole piece of, I guess, social energy, which would be enormously good for the, you know, human flourishing in this world.
MARTIN: Sylvia Ann Hewlett is an economist and the founding president of the Center for Talent Innovation. The center released a report today, which she co-authored, titled "Harnessing The Power Of The Purse." And she was with us from our bureau in London. Sylvia Ann Hewlett, it was a pleasure to speak with you as always. Thank you for joining us.
HEWLETT: It was great. Transcript provided by NPR, Copyright NPR.