In the 2000 movie release “Boiler Room” Greg Weinstein (in)famously talked about how to sell stocks to women. His advice? Don’t.
“We don't sell stock to women. I don't care who it is, we don't do it. Nancy Sinatra calls, you tell her you're sorry.” – Greg Weinstein
While I’m not on a Hollywood big screen, I am here to tell you this: Greg Weinstein is a moron.
Let me give you a few facts about women, wealth and investing.
- Studies have shown that women control 51.3% of personal wealth, and that number is expected to grow to 66% by 2030;
- U.S. women are an economy equal in size to the entire economy of Japan;
- Women make up 47% of the top wealth holders in the U.S.;
- Women are either the sole decision maker or an equal decision maker in up to 90% of high net worth households;
- A 2014 MainStay Investments study showed that 89% of women who had invested in alternatives had a positive experience and that 27% of women (compared with 20% of men) are looking towards alternative investments; and,
- High net worth women are more likely to invest in alternative investments. According to a 2015 CNBC article women are “three times more likely to invest in hedge funds, venture capital and private equity and twice as likely to invest in commodities and precious metals.”
Affluent women are a powerful and growing force in the alternative investment investor landscape.
According to a 2014 Preqin report, high net worth investors account for 9% of hedge fund investors by type and 3.6% of the total assets in hedge funds. For many emerging hedge funds, high net worth investors comprise up to 100% of their assets under management. High net worth investors are therefore a critical part of the alternative investment investor-verse.
One final fact: Preqin released statistics on Monday showing that assets under management in alternative investments (including hedge funds, private equity, real estate, private debt and infrastructure) has grown to $6.9 trillion dollars.
If high net worth investors account for 3.6% of the AUM in alternatives, then nearly $250 billion of all alternative investment assets come from their pockets.
If women are sole or equal decision makers in 90% of high net worth households, then women control or influence nearly $225 billion of alternative investments.
As managers struggle to raise assets, as RIAs and CFPs look for new clients, as first funds look to launch, there should be a concerted effort to integrate this significant segment of the investor-verse. Failure to do so is not just short sighted, it’s also business-limiting.
If you haven’t started thinking about how you can attract female investors, it’s time to start. I attended a women and wealth conference in New York last week. There were only three men in attendance. One was a speaker. One worked for another speaker. I didn’t get a chance to meet number 3, but suffice it to say that, based on my experience last week, it seems the emerging market that is women is continues to be overlooked by the financial services industry.
Wake up, y’all. Greg Weinstein was wrong.
Sources: Fara Warner: “Power of the Purse” & the American College of Financial Services, IRS, Bank of America Merrill Lynch, CNBC, Preqin)