"Financial equality starts with equal pocket money" - Interview Mara Harvey

Dear Mara, you are heading Global UHNW Germany, Austria, Italy at UBS and are dedicated to promoting female clients’ needs in the financial industry. You are also author of a series of children’s books on financial confidence, equality and sustainability, and a book on women and finance and mother of two children. How did you get to writing children's books?

I undertook a large amount of research to understand female clients and what influences women’s wealth creation. We found significant differences in wealth creation between men and women with a key driver being the professional pay gap. Looking closer at the pay gap, we came across research that showed that this pay gap, in fact, already started with pocket money. Research in Germany, the UK, the Netherlands, Australia, and the US confirmed that by the age of 10 there is a gap already. That’s when I realized that talking to professional women is too late - we need to have this conversation 20 years earlier! It is hard to believe because no parent would ever actively discriminate. There seems to be an underlying stigma that we value girls’ work differently than we value boys’ work. Already at an early age, girls tend towards less well paid jobs and more unpaid work than boys do. I set out to change this and stimulate a dialogue with girls about money, earning, saving, spending, and doing good – already as of the age of 5. We need girls to grow up knowing there is a problem and equip them with the skills to solve the problem.

"The pay gap already starts with pocket money. Research confirmed

that by the age of 10 there is a gap already."

How do women today think about finance?

We studied extensively the characteristics of professional women and what happens over the course of their life. As part of this research, we analysed satisfaction surveys about what women appreciate in finance and what needs are unmet. There were three clear findings: First, the financial industry is not focused on women’s needs; Second, the financial jargon is perceived as very alienating – particularly for women; Third, the interaction with financial institutions is not enjoyable and perceived as “worse than going to the dentist”.

How do women’s needs differ in particular with regards to their wealth journey?

We looked closely at the wealth journey and there were different observations. First, the pay gap. A professional pay gap of 10% can lead to 40% less wealth over an active lifetime. A pay gap of 20% (which is closer to reality) results in a wealth gap of over 80%. Many women don’t have any chance to create the amount of wealth required to sustain their quality of life after retirement. Second, longevity. I saw the reality of my mother who had an accident and had to go into a retirement home, which has a certain cost. My mother is now 88 and might easily live another 10 years. There is a realistic chance that she might run out of money. Third, there are other aspects like part-time work, career discontinuity, and risk appetite. Very often I come across women who say “I don’t have enough money to take risk”. There are different definitions of risk. One being equity market volatility risk. Another one being the risk of not being able to sustain yourself after the age of 65. Both are true notions of risk, but we too often focus only on the short term perspective. It is key to open up the dialogue that for women risk is something very different than for men. The way they engage, they perceive risk and manage it requires a very different dialogue.

"A pay gap of 20% results in a wealth gap of 80% over an active lifetime.

Many women don't have any chance to create the amount of wealth

required to sustain their quality of life after retirement."

Why is there so much jargon used in the financial industry?

My gut feeling is that there is a fundamental difference in how men and women build trust. From my experience, men try to build trust in their first dialogue with people by showing competency and that they understand the technical details. Women build trust on a personal level. Interpersonal skills are very important in a first step. Their base assumption is that their counterpart is competent if he or she works for a bank. So firstly they want to know whether the person opposite them is willing to listen sincerely to their needs. I am stereotyping a little bit now, but jargon is off-putting for women on two levels: It is not trust-building and on top of that, it is patronizing. Men often don’t realize this because they are convinced they are building trust this way.

Then how do women judge competence?

I think women judge competence by the ability of explaining something complex in a simple way and without an alienating terminology. Doctors are the best example: They will never start talking to you on a technical level but always on a human level, and will follow your cue on how deep to go into the technicalities. It is key that banking does the same and makes the conversation more human and engaging.

"Financial jargon is off-putting for women on two levels:

It is not trust-building and it is patronizing. Men often don’t realize this

because they are convinced they are building trust this way."

There has also been a lot of bad bank media. How can we best create trust in a meaningful way?

In fact, millennial women abdicate wealth decisions more than previous generations, even though they are generally more emancipated. I see the reason for this in the decade of “bad bank messaging”. Women are on aggregate very values-driven which translates into a refusal to engage with institutions that are not aligned with their values. This is exactly why we want to shift the dialogue and spark industry debate. Women need to have a broader dialogue around risk and money and need to move away from classic perceptions of risk. The hard thing is to do it systematically. Big organizations need to look at the entire value chain with a female lens. This is why the industry must look beyond implementing marketing initiatives targeting women. For example, we need to ask ourselves for each man that we serve as a client, where are the women: wife, daughters, mother. What are their needs and what needs to change so that they feel welcome and engaged, too? For all touchpoints with clients at UBS we created quantitative and qualitative indicators. These are all small nuances, revisiting the images, wording and jargon we use in research and publications and at events. Otherwise it is just pink marketing.

Do women serve female clients better?

No. What matters is that somebody really understands me first and then brings the technical expertise. However, it is easier to get women to engage in finance if their first interaction is with a woman, because it lowers the barrier. Many women don’t feel financially literate but it is not actually about literacy, but about confidence. It’s a misperception. We are not intimidated when we go to a heart surgeon because he is speaking on a human level. But we are intimidated by bankers because we put ourselves under too much pressure thinking that we need to be experts. Research confirms that confidence is more important than expertise – and confidence is shaped by the age of 5.

"Research confirms that confidence is more important than expertise – and confidence is shaped by the age of 5."

Do you think it should be the job of bankers to educate women on their wealth journey or whose job is it?

There is no simple answer because this education has to happen on so many levels. It is a very values based conversation about what financial decisions are important to facilitate the life we want to live. It’s a conversation that has to happen early and at home. It begins with questions on whether to do an apprenticeship or go to university. And continues with have you calculated the consequences of leaving your career while parenting? Unfortunately, with digitalization, we are trending towards less dialogue. In fact, the people who need the dialogue most, have the least dialogue as they often have no banker to talk to. This is why we at UBS decided to make our self-assessment of financial confidence open source and available online.

Many topics are not very sexy for example retirement. How do we get people to think about them?

Time is so limited that women tend to put themselves last and miss to address these big questions. Women need to realize they need to take it into their own hands. It is those with only little wealth that need the dialogue most. I call this the “safety trap”. People that need it most tend to put the money into a savings account. They are afraid of the short term volatility and don’t address the long term quality of life risk. We need to take this dialogue into as many women networks as we possibly can.

Thank you very much for this great and insightful interview!

Mara heads Global UHNW Germany, Austria, Italy at UBS and has been with the bank for over 18 years. She holds a doctorate with highest honors in Political Economy and a degree in economic policy and econometrics. She is author of the series of children’s books A Smart Way to Start and Women and Risk. Mara is mother of 2 boys.

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