Private banks risk missing ‘$100trn+ opportunity’ amid rise in women’s wealth

Private banks are at risk of missing an over $100trn opportunity as many are failing to adapt their approaches to women’s financial needs, according to a report from HSBC Private Bank.

Its Women and Wealth: A Global Opportunity report highlighted that women were creating, inheriting, and controlling a greater proportion of wealth than ever before.

However, it warned that wealthy women had historically been under-served compared to men, with many financial institutions failing to fully embrace a client-centric approach to engage female clients.

This was partly due to a misunderstanding of some of the gender differences between male and female investors, HSBC Private Bank noted.

It found that women were more likely to believe the purpose of their wealth was to plan for retirement or fund their children’s education, alongside making a positive impact on society, with women 9 percentage points more likely to support philanthropy than men.

Citing analysis from McKinsey & Co, HSBC Private Bank said that around 40 per cent of investible global wealth was set to be controlled by women in the next five years, amounting to $113trn in assets.

It therefore argued there were “clear opportunities” for firms to adapt their approaches around the themes of investment access, advice and engagement, and entrepreneurial wealth.

The report stated that female investors were underrepresented in private markets and direct investment opportunities, and private banks had the chance to expand access and engagement in areas such as private equity, venture capital, and co-investments.

Additionally, many women reported lower confidence in investment decision making, which HSBC Private Bank said reflected an industry that had historically been designed around male clients, presenting an opportunity for private banks to provide clearer advice, education, and engagement tailored to female investors.

The report also identified continued barriers to female entrepreneurs building and scaling businesses, including access to capital and networks.

HSBC Private Bank’s research showed women were 6 percentage points less likely to have a mentor for private business advice and guidance.

“The greatest wealth transfer is under way and women are not just participants – they are decision makers, founders, investors and stewards of capital,” commented HSBC Private Bank chief executive, Ida Liu.

“With women building, inheriting, and directing capital at an unprecedented scale, the future of private banking will depend on how well we act as partners.”

HSBC head of wealth and premier solutions, Lavanya Chari, added: “As we see more women join the ranks of the ultra-wealthy, we are not only seeing a greater understanding of the make-up of their portfolios and the companies within them, but also increasing demand for a full suite of world-class investment solutions to meet their specific needs.”

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