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Brokers Are From Mars, Women Are From Venus


Finance: Brokers

Brokers Are from Mars, Women Are from Venus

But Schwab aims to get the two in sync

The idea took shape at dinner two years ago. Charles Schwab, founder of the eponymous San Francisco firm that pioneered discount brokerage, told his daughter, Carrie Schwab Pomerantz, about a family friend who called to ask what she should do with a large divorce settlement. "Dad," Pomerantz responded, "how many women can ask you personally for investment advice?"

That's when they both realized, Pomerantz recalls, that the firm was neglecting women--especially those intimidated by financial topics. "We had prided ourselves on being gender-neutral," she says. But "women feel differently and learn differently about investing." Pomerantz, 40, who was assistant branch manager in Atlanta at the time, subsequently took charge of developing special marketing for women. Her efforts are now bearing fruit. Late in September, Charles Schwab & Co. launched its first investment seminars designed specifically for women and taught by women.

It's astounding that Schwab didn't discover the women's market sooner. Full-service financial firms have been marketing to women for most of the past decade--and have no doubt swiped some of Schwab's female customers. But now, Schwab, once a no-frills broker, is turning itself into a full-service firm--and, naturally, is looking for full-service clients. Says Pomerantz: "The women's effort falls nicely into that."

In fact, the firm has a chance to seize a major opportunity. Wall Street's focus has been chiefly on wealthy women with assets of $500,000 and up. Schwab is targeting a broader audience: Even women with less than $100,000 can sign up. The firm has a whiz-bang marketing record: Its invention of the mutual-fund supermarket in the 1980s transformed fund investing, and in the 1990s, it swiftly made itself the top online broker. Now, going after mainstream and lower-income women, Schwab "will have an impact," says Christopher Hayes, director of the National Center for Women & Retirement Research in Southampton, N.Y.

Women certainly have loads of money. The Securities Industry Assn. estimates that some 222,000 women now head households with incomes of more than $100,000---and that the number of such women will double by 2010, when they'll control more than $1 trillion of assets. Meanwhile, women members of the National Association of Investors Corp., a nonprofit education group in Madison Heights, Mich., have jumped sixfold, to 330,000, in the past decade.NO JARGON. Pomerantz is taking a notably intimate approach. Rivals' women-only seminars typically have 100 or more participants, but Schwab is keeping its groups down to 15 to 40. There's plenty of time for attendees to get to know each other, sometimes over coffee and snacks. The seminars avoid jargon and tie financial planning to real-life situations, such as getting divorced or having a child. "We're trying to speak to women in terms relevant to their lives and in language that's appealing to them," Pomerantz says. Other firms take similar tacks. One recent Salomon Smith Barney seminar discussed companies that are researching hormone-replacement therapy and techniques to conceal varicose veins, says Mindy Ross, a senior marketing vice-president at Salomon.

Schwab's seminars are too new to show results yet. But other firms report marked success. At Oppenheimer Funds, women have some 1.2 million accounts, up from 270,000 in 1993, when the fund manager first started targeting women. At Morgan Stanley Dean Witter, about two-thirds of participants at its women's seminars make appointments with advisers after a session, vs. about a fifth of attendees at other seminars, says Rosalie Clough, a senior vice-president for marketing.

Schwab's Pomerantz isn't ignoring the fact that women are the biggest users of the Internet either. The firm's new Web site includes articles on such topics as "How Not to Leave Money to Your Ex." Morgan Stanley, too, plans to launch a site for women next year. If Schwab is to make its mark with women, it'll have to stand up to heated competition.By Louise Lee in San Mateo, Calif.Return to top


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