Whether you are buying a new couch, car or house, individual preferences will always be different. Factor in gender, and, as any married couple will know, preferences become even more complex. Portfolio management is a process that involves trust between a client and an asset manager in order to develop a secure investment strategy to improve the investment portfolio, and pitch it at a level of appropriate risk for the client’s risk appetite. With such an important and complex topic as money investments, it is surprising that the needs of the majority of female and male clients are painted with a broad brush by today’s financial advisors and portfolio managers.
Research
According to research, an untended consequence of this is that the investment consultations with women are often more brief, and less specialised than with men. The particular needs of female clientèle are often ignored by financial advisers when they consider the asset managers to use. Portfolio manager at Genève Invest Europe, Daniel Jark, says “often this happens because the difference between male and female investors has not been explored in depth by advisers or financial asset managers.” Women often complain “their asset management services are not tailored to their needs and are not taken seriously during portfolio management consultations.”
The Differences
In general, female clients tend to place more significance on being well-informed throughout the investment decision process. Female clientèle require a perceived higher degree of honesty, clarity and transparency, without handing over too much control. Men in general have slightly different priorities; although of course generalisations are only helpful in the way that they help us hone in on specifics. “Practically, this means that women prefer an individual account rather than a joint account, as well as wanting to limit third party administrative and management power in investment decisions,” Daniel Jark adds. For instance, women tend to prefer having the authority to make cash withdrawals and electronic depository transfers, as opposed to giving that power to their financial advisor. Moreover, Jark explains, women tend to want to be able to review their asset positions, as well as the performance of the chosen investment strategy. Even more important, however, is their preference that an asset manager use absolute transparency when introducing an investment concept. Therefore, women weigh the pros and cons of strategies and products by developing an understanding of functionality as well as the assessment of potential risks and rewards. Men tend to be more transactional in their understanding of the financial picture. Female investors usually operate more conservatively than men, and tend to want to avoid overt risk. Capital preservation, as well as a continuous and considerable yield, appeals to the female demographic more than the speculation of a fast profit gain, making interest-rate related securities popular among female investors. This, however, does not mean at all that sophisticated female investors are, or need to be, satisfied with fixed income and conventional accounts with yearly interest of 1-2 percent per annum. The female investor demographic is much more diverse and complex than that.
Fixed Income
“In the last five years, with security-oriented investment strategies, on the basis of fixed-income securities, yields of seven percent have been attainable; and that’s after the deduction of fees,” Daniel Jark adds. The portfolio managers at Genève Invest make it a priority to try to better understand the complexities of the female client’s investment needs. Genève Invest’s fixed income specialists offer broad and effective diversification with professional security elements in mind. For instance, for an investment amount of €50,000, the portfolio managers at Genève Invest aim to invest in around ten different corporate bonds of successful and respectably sized companies, whilst keeping a keen eye on selection process ratings and the future prospects of the corporations.
