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Mumbai
+91-22-66210700

142, 14th Floor, Maker Chambers VI, Nariman Point, Mumbai - 400021

SEBI Office: Plot No. C4-A, 'G' Block, Bandra-Kurla Complex, Bandra(East), Mumbai - 400051

Noida
+91-88-60824008

18B106, 18th Floor, Berger Delhi One, Sector 16B, Noida - 201301

SEBI Office: NBCC Complex, Office Tower-1, 8th Floor, Plate B, East Kidwai Nagar, New Delhi – 110023

Bengaluru
+91-80-67433089

815, 8th Floor, The Estate, Regus Business Centre, Dickenson Road, Bengaluru - 560042

SEBI Office: 2nd Floor, Jeevan Mangal Building, No.4, Residency Road, Bengaluru - 560025

Chennai
+91-44-66385532

Workafella No.10, Uthamar Gandhi Salai, Nungambakkam High Road, Nungambakam, Chennai - 600034

SEBI Office: 7th Floor, 756-L, Anna Salai, Chennai - 600002

Kochi
+91-484-4148112

Centre A, 8th Floor, Alapatt Heritage Building, MG Road, Kochi - 682035

SEBI Office: 6th Floor, Finance Tower, Kaloor, Kochi - 682017

Goa
+91-99-23191607

603A, 6th Floor, Dempo Trade Centre, Patto, Panjim, Goa - 403001

SEBI Office: 6th Floor, EDC House, Atmaram Borkar Road, Panaji - 403001, Goa

Hyderabad
+91-81-06712344

WeWork Krishe Emerald – 03B104, Kondapur Main Road, Laxmi Cyber City,

Whitefields, Kondapur, Hyderabad, Telangana 500081

Lip service and less support: Financial institutions in India have been unable to help women chalk out investment plans

article • Investment Management
Soumya Rajan
29 April 2022 | 3 Minutes

As the pandemic raged through the lives and livelihoods of people around the world, women had it harder. A study conducted by McKinsey revealed that while women constitute 39 percent of global employment, they accounted for 54 percent of the jobs lost during the pandemic. The numbers look much worse for India—we already have a worrying statistic of only 20 percent of the workforce pre-pandemic being women, but women accounted for 47 percent of job losses during the first wave of the pandemic. One out of every four working women in India had to bid goodbye to her financial independence in the last two years.

The primary reason for this is the burden women face with unpaid domestic work and family obligations. It was not just women in blue-collar jobs that bore the brunt, but also gold-collar women professionals such as doctors and lawyers who found it hard to keep a balance between their professional and personal lives. I believe there are three key lessons that the Covid-19 pandemic taught women professionals, entrepreneurs, and inheritors:

  • Financial independence is not equal to financial well-being

  • Financial literacy is key to financial independence

  • Wealth creation ultimately leads to well-being

Financial independence is not equal to financial well-being

Women mostly equate financial freedom with financial independence. But what happens when the source of primary income dries up and expenses continue? During the last couple of years, women have faced a sudden job loss or a funding scarcity for their businesses. A worrying data point for the future is that the number of new start-ups founded by women has dropped by 67 percent between 2018 and 2021. It was the second year in a row that VC funding to women-led companies shrank from 3 percent in 2019 to 2 percent in 2021. The silver lining though is that fundraising was at an all-time high in 2021, so the absolute dollar amount of US$6.4bn that went to women-only founded companies was the highest it’s ever been.

Women who have been able to navigate this period successfully have been the ones that preserved and grew their money through planned investments over this period, and this is where having a wealth advisor became important. The role of a wealth manager today has evolved from traditional investment advice to someone who is a trusted person who looks after their client’s overall financial well-being. As women, our needs are different and so are our life goals. On average, women live longer than men, are more likely to take career breaks and are more susceptible to unplanned life events such as job loss or divorce. Therefore, their well-being cannot be restricted to the years of stable income but needs to account for an entire lifespan.

Financial literacy is key to financial well-being

A 2021 survey conducted by the online investment platform Groww among 30,000 women investors, showed that almost 55 percent of women respondents allow others to invest on their behalf because they are underconfident about managing their own money. The same survey also indicated that the goal for investing changes with age. For instance, supporting the family such as children’s education is the top priority for women above the age of 35.  This supports the hypothesis that women often prioritize their loved ones over themselves. They also continue to prefer traditional investment options. This is not because women are risk-averse; rather women are risk-aware. Women are more mindful of the potential risks of a financial product and like to evaluate the risk and reward before diving in with little thought. This also leads them to stay away from financial products that they do not understand. This is where a good wealth manager can step in to help educate. Financial content for women needs to be customized and shared in a palatable format. Awareness needs to be built through knowledge sessions and meaningful networks that encourage financial literacy.

Wealth creation ultimately leads to well-being

As the saying goes—true wealth is the ability to live life on your terms. Being financially independent and financially literate does not necessarily result in financial freedom.

A long-term investment strategy, adequate insurance cover, building an emergency fund, taking part in family finances, planning for your children’s education and retirement, all contribute towards financial freedom. Therefore, it is important that wealth managers design a purpose-driven investment strategy for women to achieve the lifestyle they aspire. The meaning of true wealth will differ for every woman. For one it may be owning their dream home and feeling secure, for another ensuring that their legacy is carried forward by future generations. Therefore, it is important for wealth advisors today to not just focus on monetary goals but also understand the emotional and psychological fulfillment of their women clients.

Women control one-third of the world’s wealth, and UBS estimates that wealth for women in Asia, outside of Japan, will jump to $7.3 trillion by 2025, an increase of ~50 percent from $4.8 trillion in 2020. Financial institutions in India have been behind the curve in solving for the needs of women clients, with too much lip service and much less tangible support. Perhaps the time has come for a truly differentiated service offering and client experience that caters exclusively to creating women of wealth.

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Your legacy awaits



Topic of Enquiry*:


How did you discover Waterfield?





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Follow Us
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Offices
Mumbai
+91-22-66210700

142, 14th Floor, Maker Chambers VI, Nariman Point, Mumbai - 400021

SEBI Office: Plot No. C4-A, 'G' Block, Bandra-Kurla Complex, Bandra(East), Mumbai - 400051

Noida
+91-88-60824008

18B106, 18th Floor, Berger Delhi One, Sector 16B, Noida - 201301

SEBI Office: NBCC Complex, Office Tower-1, 8th Floor, Plate B, East Kidwai Nagar, New Delhi – 110023

Bengaluru
+91-80-67433089

815, 8th Floor, The Estate, Regus Business Centre, Dickenson Road, Bengaluru - 560042

SEBI Office: 2nd Floor, Jeevan Mangal Building, No.4, Residency Road, Bengaluru - 560025

Chennai
+91-44-66385532

Workafella No.10, Uthamar Gandhi Salai, Nungambakkam High Road, Nungambakam, Chennai - 600034

SEBI Office: 7th Floor, 756-L, Anna Salai, Chennai - 600002

Kochi
+91-484-4148112

Centre A, 8th Floor, Alapatt Heritage Building, MG Road, Kochi - 682035

SEBI Office: 6th Floor, Finance Tower, Kaloor, Kochi - 682017

Goa
+91-99-23191607

603A, 6th Floor, Dempo Trade Centre, Patto, Panjim, Goa - 403001

SEBI Office: 6th Floor, EDC House, Atmaram Borkar Road, Panaji - 403001, Goa

Hyderabad
+91-81-06712344

WeWork Krishe Emerald – 03B104, Kondapur Main Road, Laxmi Cyber City,

Whitefields, Kondapur, Hyderabad, Telangana 500081