Where Women Call the Shots on Money

When it comes to investment decisions, men still make the lion's share of the choices about whether to invest in stocks, bonds or real estate. But the gap is narrowing, and in 2009, women decided how to allocate about $20 trillion in investments -- about 27% of the world's wealth. That's up by 16% from one year earlier.

As more women call the shots on money, they also want their wealth managers to do a better job of meeting their needs, according to a report just released by The Boston Consulting Group.

What do women want? The same attention, advice, terms and deals that men get with advisers who provide investment recommendations based on their goals and risk profiles. But at the same time, women also want advisers to tailor services to them, since women have very different needs and expectations than men.

Women Get "Dumbed Down" Advice

For example, during the survey by BCG, women said advisers tend to assume they have a lower risk tolerance than men so advisers provide only a narrow range of investment alternatives. Some women, according to BCG, claim advisers give them "dumbed down" versions of their standard offerings, while others say advisers for women are too quick to focus on strategies that don't emphasize performance, assuming that women are more inclined to make investment decisions based on social issues.

Wealth managers -- who are struggling to win back clients, or simply keep them -- would do well to target this group. According to BCG, the number of women in the global workforce doubled to 1.2 billion between 1980 and 2008. In addition, the income gap between men and women has declined, and everyone today generally works more and earns more. Women are also, increasingly, taking over family finances, determining how funds should be allocated and where they should be invested.

So where do women wield the most power over wealth? Here are the top 10 global markets by the percentage of total wealth controlled by women.

North America
A greater percentage of total wealth is managed by women in North America than in any other region of the world. North America, together with Western Europe, account for more than two-thirds, or $14.3 trillion, of the wealth controlled by women. North American women say they want equal access to information, equal consideration and terms for loans and equal access to special deals at banks.

Percentage of Total Wealth: 33%
Total Wealth Controlled by Women: $9 trillion
Compounded Annual Growth over 2008: 17%

Australia and New Zealand
While women control far less in dollar terms, as a percentage of total wealth in Australia and New Zealand women come in a close second to North America. After dropping sharply in 2008, the amount of wealth controlled by women rose by 24% in 2009. But old habits are hard to change. In New Zealand, one woman complains in BCG's report, banks tend to spend their marketing budgets on men by sponsoring sports events such as football and rugby and inviting men to the corporate boxes at games. Women, she says, do not get that kind of treatment.

Percentage of Total Wealth: 31%
Total Wealth Controlled by Women: $0.5 trillion
Compounded Annual Growth over 2008: 24%

Asia (excluding Japan)
The percentage of wealth controlled by women in Asia is rising, partly because women increasingly inherit wealth due to their longevity, according to the report. But BCG says women in Asia continue to inherit less than men, although the gap is narrowing.

Percentage of Total Wealth: 29%
Total Wealth Controlled by Women: $2.8 trillion
Compounded Annual Growth over 2008: 29%

Western Europe
Historically, women here, as in North America, have had good access to professional and educational opportunities compared to women in some other regions of the world. Says a woman in Spain, quoted in BCG's report, "What bankers need is a revolution like the automotive industry had, to finally understand that women not only sit in the cars but also choose, buy and then drive them."

Percentage of Total Wealth: 26%
Total Wealth Controlled by Women: $5.3 trillion
Compounded Annual Growth over 2008: 13%

Middle East
High divorce rates in some countries make women's financial well-being precarious, according to BCG, leading them to take more control of their wealth management needs. But a growing proportion of women investors are also entrepreneurs, approaching the high-net-worth segment. Women here say it's difficult to find wealth management advisers who take them seriously and are willing to explain products and risks.

Percentage of Total Wealth: 22%
Total Wealth Controlled by Women: $0.5 trillion
Compounded Annual Growth over 2008: 15%

Russia
Russian women fall in the middle of all global regions in their investment power, but increasingly, women are taking more control of where to invest. While assets under management controlled by women rose in Russia by 17% over 2008, BCG expects to see continued growth as women play a more critical role.

Percentage of Total Wealth: 21%
Total Wealth Controlled by Women: 0.1 trillion
Compounded Annual Growth over 2008: 17%

Eastern Europe (excluding Russia)
A private banker in Eastern Europe says that the market here is still young, but more than half of its female clients are entrepreneurs, with a proficiency in financial markets that is similar to that of men. Interestingly, there is a view here that female relationship managers are more trustworthy than men. If that holds true, then female advisers should do a better job developing client relationships with women.

Percentage of Total Wealth:19%
Total Wealth Controlled by Women: $0.04 trillion
Compounded Annual Growth over 2008: 15%

Latin America
Women in Latin America took much more control over their investments in 2009 -- managing 18% more money in investments than a year earlier. Despite that growth, Latin America still makes up the bottom half of the regions of the world for women making investment decisions.

Percentage of Total Wealth: 18%
Total Wealth Controlled by Women: $0.4 trillion
Compounded Annual Growth over 2008: 18%

Japan
Women in the land of the rising sun fared even worse than in the rest of Asia. While women control a significant amount of capital, as a percentage of total wealth it pales in comparison to what women in the rest of the world manage. And there wasn't much of a rebound after 2008. The amount of wealth controlled by women rose only by 2%.

Percentage of Total Wealth: 14%
Total Wealth Controlled by Women: $1.5 trillion
Compounded Annual Growth over 2008: 2%

Africa
Africa bottoms out the list. Here, only 11% of total wealth is managed by women, and the total amount invested is far less than in any other global region. But there are optimistic signs: BCG says that between now and 2014, female-controlled wealth will grow by 19% in Africa -- a greater increase than anywhere else in the world.

Percentage of Total Wealth: 11%
Total Wealth Controlled by Women: $0.04 trillion
Compounded Annual Growth over 2008: 15%