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The Future of Finance is Female | Anita Knotts | TEDxNaperville - YouTube
Channel: TEDx Talks
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Transcriber: Keira White
Reviewer: Sebastian Betti
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In 1870, Victoria Woodhull was the
first female stockbroker on Wall Street.
[24]
Fun fact: She was also the first woman
to run for President of the United States.
[30]
In the 151 years since then,
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we still havenāt had a female
President of the United States
[36]
and female advisers represent
only 18 percent of all advisers.
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Now, I havenāt decided
to run for President yet
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but I do have decades of
experience as an adviser
[48]
and leader in wealth management.
[51]
This probably won't shock any of you,
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but women and men donāt have
the same investing habits.
[57]
Women typically reinvest as
much as 90 percent of their wealth
[61]
back into their families and communities.
[64]
That number for men is only 35 percent.
[67]
When women are economically
and financially empowered,
[71]
they donāt just buy fast cars
and golf memberships,
[74]
or charter their own rockets
to outer space.
[76]
No, they actually invest in education,
health and well-being for their families.
[83]
As an advisor for nearly 30 years, I've
seen these differences with my own eyes.
[88]
Our male clients,
[89]
always wanted to make sure they
were outperforming some benchmark.
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Whether it was the S&P 500,
[95]
the Dow Jones or even
their next door neighbor.
[99]
They were very fixated on a monetary goal.
[103]
Our female clients were more focused
on making sure their money
[106]
would be sufficient to meet
longer term life goals,
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like taking care of their children,
their aging parents,
[113]
perhaps starting a business.
[115]
The money was never the end goal.
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It was simply a means to the end.
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Women are projected to control
nearly 110 trillion dollars
[126]
in global wealth by the year 2025.
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Seem a bit high to you?
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Think about it.
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In this country alone,
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women have longer
life expectancies than men.
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We have, unfortunately,
a very high rate of divorce.
[138]
And then thereās
the great wealth transfer.
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When baby boomers will pass on
[143]
and women stand to inherit
a lot of those assets.
[146]
Think about it.
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If they invest 90 percent
[150]
of that wealth back into
their families and communities,
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thatās a whole lot of trillions going to
education, health and wellbeing.
[158]
If all of this talk about trillions
sounds like monopoly money to you,
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donāt get so caught up in the trillions.
[165]
Instead, focus on the concept
that women use their wealth
[170]
to make life better for all.
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So if financial empowerment for
women is indeed better for all of us,
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how should an industry like wealth
management evolve to meet their needs?
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There are two groups of women to consider.
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Women investors and women
who work in this industry.
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First, let's talk about women investors.
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When I say the word investment,
what images come to mind?
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Probably stocks, bonds,
the Bull and the Bear, Wall Street,
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crazy, hyper-competitive environments,
fast talking brokers.
[208]
Now think about most of
the women in your life.
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Are they drawn to these images?
Or do they run for the hills screaming?
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Now let's look at women in the industry.
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As I mentioned, only 18 percent
of financial advisers are female.
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But can you blame them?
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Typical female professions
like teaching and nursing
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involve empathy, compassion,
educating, nurturing.
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A lot of traits that we naturally
attribute to women.
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But were these the words you thought of,
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when I said investment,
just a few minutes ago?
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Probably not.
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The investment firm TIAA-CREF
did a study a few years ago
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that showed that two thirds of
women investors donāt trust our industry.
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They donāt feel that the investing world
was built for someone like them.
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When I was an advisor speaking
to recently widowed clients,
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do you think they wanted to talk about
the S&P 500 at that first meeting?
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Do you think they wanted to hear
about the latest āhot stockā
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that would make them wealthy overnight?
No.
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They wanted someone
to listen to their fears.
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They wanted someone who was patient with
them as they were processing their grief.
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I spoke to women going through
a painful divorce
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and the only adviser they knew
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was someone who constantly looked
at their husband during meetings
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but never at them.
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And I canāt tell you the number of times,
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when I was in a meeting with
a male adviser, a colleague of mine,
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who was real intent on showing that client
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just how knowledgeable he was
about the financial markets.
[309]
The goal for that meeting
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was to make sure she didnāt take
her account elsewhere.
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Now that her husband was
no longer in the picture.
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But you know what, I couldnāt really
blame these colleagues of mine,
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we all worked in a system that
rewarded that behavior.
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Get the assets, get the assets.
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And when the meeting was over,
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the woman would ask me questions like;
do you think this is right for me?
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What advice would you give me, Anita,
if I was your mother?
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(Sigh)
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They were desperate to trust someone
because this was their livelihood.
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So you might say it's easy, right?
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Letās just hire more women in the field,
to work with these women investors.
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Not so fast.
Thatās only part of the solution.
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After all of these years working in
this field, I began to ask myself,
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Does the wealth management industry
need to simply evolve?
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Or does it need a complete
gut level transformation?
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In other words,
if the client of the future is female,
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does the Bull and Bear approach
really work anymore?
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Now, to be clear, Iām not advocating
a āPink it and shrink itā approach.
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In fact, Iām as guilty as anyone when it
comes to launching āWomenās Initiativesā.
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The problem is that women are not a niche.
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I found that the advice
a woman entrepreneur needed
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was different from what
a widow or a divorcƩe
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or a female corporate executive needed.
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But while their needs were different,
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the one thing they all had in common
was the need to be understood,
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be informed and be a partner
in financial decision making.
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I learned that the skill that
resonated most with them
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was not some rote memorization
of ratios and statistics,
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but the art of listening.
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I found that rather than holding
the meetings in a conference room
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with dark wood and leather chairs
and awards and trophies on the wall,
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it was so much more effective
having meetings in coffee shops.
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Or over dinner.
Or even better at their home.
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It allowed us to better
understand the person,
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their aspirations and goals,
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rather than reducing them to
this monthās sales goal.
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The problem is
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that these softer skills, which we
attribute to being feminine,
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like relationship building
and listening and patience,
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arenāt always rewarded in this field.
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Itās a big shift
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for an industry thatās been built on
commissions and fees and egos,
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where more is better.
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But what would happen if leaders started
rewarding quality over quantity?
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What would happen if we
focused on educating the client,
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rather than rushing through
a PowerPoint presentation?
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And contrary to what many leaders at the
top believe and trust me, I know a few,
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this approach does not have to come
at the cost of lower profitability.
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Think about it, if our approach results in
a stronger relationship with the client,
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thatās a higher client retention.
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Perhaps additional wallet share,
maybe referrals.
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I discovered that the key to success
was in the human connection.
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Strong human connections
result in trusting relationships
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and whoās better at building
trusting relationships than women?
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The media loves to portray successful
advisors as āThe Wolves of Wall Streetā.
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Bernie Madoff, the fictional Gordon Gekko.
Because that's sexy, right?
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But what about real life?
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What about women like Sallie Krawcheck,
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who ran two global
wealth management firms
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and is now launching her own
to help women invest?
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What about Mellody Hobson in
our own backyard of Chicago,
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President of Ariel Investments?
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Or Carla Harris,
a Senior Executive at Morgan Stanley,
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who also happens to be a
professional gospel singer on the side?
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These are some of the most successful
people in financial services right now,
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and while they do bring strong
feminine attributes to their work,
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I can assure you
no one thinks theyāre soft.
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Transforming our industry
will not be easy.
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Because the soft skills are some of the
hardest for people to develop and master.
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And yes, the transformation must involve
the hiring and inclusion of more women
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and people of color.
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When Iām out there encouraging young women
to consider this career path,
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I often hear āIām not good at mathā
and āIām not good at salesā.
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Well, I've got news for you. Neither am I.
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In fact, I joke often,
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that Iām one of the few Indians on
this planet who isnāt great at math.
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I'm living proof that financial advisers
do not have to look a certain part.
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I mean, look at me.
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Iām a brown skinned female
immigrant from India.
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I couldn't be further from the prototype.
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When I was in college
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and I decided at some point that I
wanted to become an economics major,
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my advisor took one look at me
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with my Aqua Net spiked hair,
black lipstick, black nail polish,
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long black trench coat, combat boots,
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and he suggested I go into
fashion design instead.
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Well, thank God I didn't listen to him.
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I believe my success in this field came
about because I leveraged my uniqueness.
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I have never had a desire to be
like everyone else in the room.
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My relationship building skills,
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my compassion for people,
whether it was my clients or my team,
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the fact that I made it OK to
show vulnerability as a leader
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in a very male-dominated environment.
All these things made me different.
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Was I always rewarded for it?
Depends on how you define reward.
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Sure, I made a great living.
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But the real reward goes back to
how I began this presentation.
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What do women do with their wealth?
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They reinvest back
into the community, right?
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Well, Iām now reinvesting
back into my community,
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by developing and preparing other
women to be successful in this field.
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And helping firms to also meet this moment
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in history because itās
an important moment in history.
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Why donāt we just call
wealth management what it really is?
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Financial life management.
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We have to start
by making sure the front lines
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look as diverse as the clients we serve.
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But again, it doesnāt stop
with hiring the right people.
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We need a paradigm shift
within the industry itself.
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Thatās the only way weāre going to
change the system and the culture.
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The people who currently hold the power
need to commit to this change.
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But it doesnāt have to be a zero-sum game.
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Everyone will be better off.
Think about it.
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Diverse companies are
35 percent more likely
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to perform better than
non-diverse companies.
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Weāll be able to attract
and retain women employees,
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if we can describe the
work we do as helping others
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and not about meeting sales goals.
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And if we can show more
gender diversity in the field,
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it's more likely that women investors will
become more trusting of our industry.
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Everybody wins.
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So whether we call it wealth management
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or financial life management
or Anitaās rant,
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we know this system was built over
the course of a few hundred years
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with a verytraditional model.
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So weāre not going to
change this overnight.
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But whether we're male or female,
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we each play a part in
its inevitable transformation.
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So letās not wait another 150 years.
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I, for one, am not waiting another day.
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Thank you.
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