Charting women’s wealth in Asia

By Bonnie Qiu  / 

Sat, Mar 08, 2014 - Page 8

In some ways, the story of Asia’s transformation over the past four decades is a story of women. From the young women who left their homes to work in the factories of Shenzhen, Ayutthaya or Penang in the 1970s and 1980s, to the pioneers who blazed a trail through Harvard, Oxford and the Sorbonne, they have reshaped the region.

Today, they are starting to reap the rewards of their hard work. Educated, empowered and employed in ways their grandmothers could only dream about, a new class of women are bending the region’s rich cultural legacy to a more egalitarian and prosperous future. A report last year by Grant Thornton showed that 31 percent of senior management positions in Taiwan were held by women compared with 29 percent in Asian countries and 24 percent worldwide. Recently, Forbes announced its top 50 list of power businesswomen for this year, two of whom are Taiwanese.

More women are not only making their own money — they are keeping control of it when they marry. They are not only investing their assets, they are running asset management firms, and research shows that on average they are running them more successfully than their male peers.

The financial power now exercised by women is changing consumer and investment markets beyond recognition. A report from the Boston Consulting Group estimated that the amount of wealth controlled by women around the world would grow by 8 percent annually from year-end 2009 through this year, led by women in emerging markets.

There is copious anecdotal evidence to back this up. Harald Wester, the chief executive of the Italian supercar manufacturer Maserati, said last year that 40 percent of his customers in China are “young businesswomen who love European craftsmanship and want to be chauffeured in their new Quattroportes.”

The growing affluence of Asian women is partially a factor of Asia getting broadly wealthier, but that effect has been amplified by changing social attitudes, better access to education, greater social mobility and a new class of female entrepreneurs.

However, if Asia is becoming a continent of more equal opportunities, it would be a mistake to think its women want exactly the same thing as men.

Women treat wealth differently.

They aspire to wealth for different reasons than men do, and they have distinctively different — and in many cases more successful — investment patterns.

For HSBC Banks’ increasingly affluent female clients, wealth is less of an end in itself than a buffer against hardship, a door to new opportunities and a resource to support their families. A pattern is emerging.

A young woman might start off conservatively with savings and already be in a position to buy an investment property in her 20s for the stable income before becoming more active in the equities market in her 30s and 40s as she generates funds for education and family travel, before returning to property in her 50s and 60s for retirement income and maybe a residence for her parents or children.

When it comes to personal investing, women tend to show greater self-discipline in sticking to their strategies, avoiding the problem of over-trading.

University of Michigan research a few years ago showed that on average men trade 56 percent more than women, which not only carries costs in and of itself, but also significantly increases the probability of so-called market timing: buying at the top of the market and selling at the bottom.

HSBC’s research also says women are less prone to overconfidence and “therefore less likely to be deluded into believing they know more than they do.” They also tend to plan more effectively for an unexpected crisis. Women look out for the next storm and prepare for inevitable uncertainty.

These traits bode well for women in Asia as changing demographics are likely to amplify the need for greater financial astuteness and planning. Women are beginning to earn substantial amounts earlier in their career, but they and their parents are living longer and require more substantial planning for old age.

It is indicative of how the financial emancipation of Asian women is a recent phenomenon that this last stage of financial planning is perhaps the least recognized by female clients. HSBC’s research shows that on average women are still under-prepared for retirement, with 10 years of savings for 23 years of post-employment life.

Women are still not doing enough to invest in their future.

Women have been the unsung authors of Asia’s industrialization: the first stage of development. The second stage — the development of service industries and the rise of productivity driven growth — will give them an even greater canvas to fulfill their potential.

Bonnie Qiu is head of retail banking and wealth management at HSBC Bank (Taiwan) Ltd.