Women Are Becoming Wealthier Than Men, Says Report

by Carla Johnson, Investors Offshore, London

27 April 2007

A new report from independent market analyst Datamonitor reveals that the number of wealthy women is soaring and the wealth gap between men and women is narrowing rapidly. The growing number of wealthy women has led to banks putting in place a number of initiatives to attract more women clients.

Lauren McAughtry, Financial Services Analyst at Datamonitor and author of the report warns however that: “the ‘champagne and chocolate approach’ won’t work, women are looking for more from their private bank than a spa discount and a pink website.”

The number of female millionaires in Britain has been rising steadily for many years on the back of social trends, most notably inheritance and the rapidly climbing divorce rate. Besides, a new generation of women have started to prosper in their own right, and female entrepreneurs are increasingly growing in number.

Perhaps unexpectedly, in 2005 there were more high net worth women in the UK than men, with 448,100 high net worth women, and 429,300 wealthy men. Currently, women make up around 46% of Britain’s 376,000 millionaires, and their number is growing by almost 11% annually.

The wealth gap between relative wealth levels still exist but it is narrowing rapidly. In 1998 the average male millionaire was worth GBP2,713,829 while the female equivalent owned GBP 1,276,188; representing a gap of 112%. However, by 2006 the average man with a million is worth GBP2,963,423 while a female millionaire is worth GBP1,969,618. The gap has fallen by 30.8% to GBP993,805. Therefore between 1998 and 2006 a male millionaire’s average wealth increased by 9.1% while the average worth of a female millionaire grew by 54%.

The report says that high street banks and private banks alike are turning to innovative, client-centric methods to attract new clients, and this approach is nowhere more clear than in the race to attract female clients. More than ever before, banks are investing in events, products, and services to catch and retain valuable female clients, and competition is becoming stiffer as the market develops.

Most high street banks have launched services and programs to attract and support female clientele, while private and investment banks have pursued different strategies. Some are beginning to provide some kinds of networking event or women’s resource such as a website or a newsletter, while others such as Citigroup Private Bank in the USA have gone as far as launching a service aimed specifically at women. However, many UK banks have yet to make a move in this area and while many private banks and wealth management divisions say they recognize the market significance of the wealthy woman, only a few appear to have taken direct action.

Lauren McAughtry stresses that: “the ability to add value hinges instead upon truly understanding their needs – day to day and long term - and providing relationship managers who can relate and speak their language.”

Recommended