The Problem with Pink
Every week I receive another unsolicited invite to a seminar to tell me, a man, how to market to a new and exciting niche: women! I never knew I was missing out on 50 percent of the population. What is this, Saudi Arabia?
No, it’s Wall Street. And it’s true, the industry doesn’t speak to women very well: Jim Cramer is too loud and gives many women I talk to anxiety. The discount brokers and wire houses are putting pink ribbons on their (metaphorical, I hope) lapels. Dozens of websites are courting female investors—seriously, “Pink Investments”? And financial columnists are writing pieces on “how women can claim their financial power.” Why is everyone so obsessed?
First, multiple studies have shown that women control just over 50 percent of the wealth in the U.S., a percentage that is likely to increase. Why? Men die younger than women, so women have more time to accumulate (and inherit) wealth. Plus, more women than men are graduating from college, which leads to a huge earnings differential over a lifetime.
Second, female investors do have gender-specific concerns such as pay inequality: Women still have to fight harder to make slightly less. Third, whether by nature or culture, the hunter mentality pervasive on Wall Street is a male trait.
Male financial professionals are often obsessed with landing the big client or the big score. What’s wrong with that? Everything. Hunting has nothing to do with long-term investing. Investing is about gathering assets and making them work efficiently, which sounds like the stereotype of a woman: allocating assets to keep the family healthy. That pragmatism and long-term perspective is what you want in an investor.
Surveys back this up. A life insurance company recently released one that found 50 percent of men reporting “plenty of investing confidence,” compared to 35 percent of women. This was framed as a bad thing, but the truth is that male investor confidence is generally unfounded—trust me on this—while a female lack of confidence strikes me as wisdom. Isn’t a little humility about investing better than overconfidence?
No wonder Wall Street sales pitches have alienated women. They can tell when appeals to their gender are only skin-deep, or if Wall Street is only paying lip service to true long-term planning: If you’re a stockbroker who has turned to the fee-only/fee-based structure in name only, your female audience will figure it out. It’s no different than when my wife smells the booze on my breath after I’ve been “working late” or doesn’t believe it for a second when I tell her that my last trip racing cars was designed purely to secure new clients.
To be fair, there are plenty of men in this business who truly believe in serving both male and female clients. We also like to hire women as lead advisors and enjoy working with clients who respect what we do; they are more frequently female than male.
Frankly, my favorite clients are widows. They have tons of money, want someone competent to help them keep it, and don’t bring the baggage—i.e., their husbands—to the table. Sorry guys, it’s just easier to work with your wives.
So, let me give the men some unsolicited advice. Turn off CNBC next time you have a woman in your office; they all know it’s entertainment at best and macho posturing at worst. Women love the idea of a globally diversified portfolio; they don’t consider diversification wimpy, as some men do. They’re not easily rattled; media-induced panic is not a dominant female trait, from what I’ve observed. They don’t try to argue with simple concepts like making a plan and executing a corresponding portfolio. And they’re smart enough to realize when “pink investing” is just another bogus sales pitch.