Instant Impact – How to build a financial marketplace that works for women

Imagine sitting down with a financial planner alongside your partner. You have comparable incomes, shared financial goals, and the same target retirement age. Yet, throughout the meeting, the planner directs the conversation almost exclusively to him.

For many women, experiences like this are all too familiar. Women routinely report feeling overlooked and underserved by the financial services industry. In fact, approximately 73 per cent say they are unhappy with how the industry treats them.

On the surface, it may seem like an industry-wide customer-service issue. But a new commentary in the Journal of Public Policy & Marketing from Ivey marketing faculty Miranda Goode and June Cotte, together with Untangle Money CEO Kristine Beese, MBA’10, argues that the issue runs much deeper. Despite progress, women are still not fully included in the financial marketplace — and the cost of that exclusion can follow them from today’s financial decisions all the way into retirement.

The market has changed. Has the model?

So, what stands in the way of women’s full participation in the financial marketplace? The commentary points to two persistent barriers.

The first is representation. Men outnumber women in financial planning roles by as much as five to one. That imbalance matters because the people designing financial products, services, and advice also influence whose needs those offerings are built to serve — from the products that get developed to the assumptions embedded in financial advice.

Access presents another challenge. Financial services have historically been built around men’s data, career trajectories, and risk profiles. Women’s lower earnings and investable assets have also led financial service providers to view them as a less attractive customer base, contributing to products, advice, and service interactions that too often fail women’s financial realities.  

The consequences of those gaps extend well beyond the financial-planning relationship itself, contributing to a significant wealth gap that follows women into retirement. On average, women's retirement balances are about 30 per cent lower than men’s.

“Market segmentation is a fundamental principle of effective marketing and good business,” said Goode. “Yet our financial system has been slow to fully apply this principle to women. Rather than designing products and services around women’s distinct financial realities, the industry has too often treated those realities as deviations from a male-default model.”

The problem is that advertising to women is not the same as creating financial products and services that meet their needs.

Financial institutions increasingly tout women as an important market, with messaging and products designed to appeal to them. Yet the research suggests there is still a gap between targeting women as customers and truly including them in the financial marketplace.

What would real inclusion look like?

Closing that gap requires more than recognizing women as an important market. It requires changing how the financial system serves them. Goode, Cotte, and Beese outline four shifts that could move the industry toward meaningful financial inclusion:

• More women shaping the industry. Increasing the representation of women in financial planning and advisory roles, leadership, and the products, policies, and research that shape the industry.
• Making women’s wealth core business. Moving beyond special initiatives and making women’s wealth a core consideration in how financial services operate.
• Building for changing financial realities. Developing training and best practices that help financial professionals serve women’s evolving financial circumstances.
• Measuring whether inclusion builds wealth. Establishing meaningful metrics to track women’s wealth and whether greater inclusion translates into long-term wealth creation.

But the authors note that greater financial inclusion is only part of the solution. It cannot, on its own, address the broader structural factors behind the gender wealth gap.

“Becoming a better-informed investor does not address being paid less in the first place,” said Goode. “Race, class, and other intersecting factors can also shape who receives meaningful access to financial services and who is seen as a valuable client.”

Addressing those larger forces will require changes well beyond the financial services industry. But that does not mean the industry has to wait for those broader shifts to begin doing things differently. There is an opportunity to rethink how financial planning is designed and delivered today — and it starts by listening to women about what they actually need.

Building a better way for women to plan their financial future

On September 28, Miranda Goode and June Cotte (Ivey Business School at Western University) and Michael Moorhouse (Lazaridis School of Business & Economics at Wilfrid Laurier University) along with Untangle Money CEO Kristine Beese (Ivey MBA’10) will launch a nationwide online study focused on women’s financial planning. Funded by the Social Sciences and Humanities Research Council of Canada (SSHRC), it will explore how financial planning can better support women and help close the financial gap.

The study is looking for women aged 25 to 50 from across Canada who have regular, full-time, or continuous access to income, are able to set aside some money each month to save or invest, and have regular internet access.

Participants will receive $30 in compensation and one year of free access to an online financial planning app developed by Untangle Money, a subscription service that normally comes with a fee.

“We’re looking for hundreds of women across Canada to join the study and share their financial experiences,” said Goode. “We can’t build better financial services for women without listening to women themselves. This is an opportunity to make your experience part of that conversation and to help create a better financial future for women.”

To learn more about the research and register to participate, visit the Financial Planning for Women research study.