Obvious Bullshit: Ignoring Women Costs Financial Industry $700 Billion a Year

-edited

A study says Ignoring women costs $700 billion dollars a year in lost profits. I say bullshit.

Obvious Bullshit

Please consider an article by Emily Cadman, on Bloomberg, Ignoring Women Costs the Financial Industry $700 Billion a Year.

The male-dominated finance industry is missing out on more than $700 billion a year in revenue by failing to listen to or tailor products for women, according to management consultancy Oliver Wyman.

“Women are arguably the single largest under-served group of customers in financial services,” Jessica Clempner, the report’s lead author, said in a statement Tuesday. “Firms are leaving money on the table by not listening to and understanding their women customers.”

No Link to Study

The article did not post a link to the study. Bloomberg seldom does. This makes it hard to see what the report really said or how.

Only Two Costs Cited

There are the only two cost examples mentioned in the article.

  • If insurers sold life policies to women at the same rate as to men, they could generate $500 million in new premiums, Oliver Wyman estimated.
  • Women also tend to hold more of their assets in cash rather than stocks and bonds, costing wealth and asset managers a potential $25 billion in fees.

The Math

Assuming those numbers are accurate, they total $25.5 billion a year.

Where the hell is the other $674.5 billion?

Please don't tell me that the $500 million was supposed to be $500 billion because I will not believe that either. Besides, if women are more cautious perhaps they are a bit smarter. Other than term-life, most insurance schemes are pure garbage.

And as for the $25 billion, with trading fees down to zero, I am more than a bit suspicious of that number as well.

OK. Let's lure women into new women-designed ETFs.

Q: Did the author propose one?

A. No

Q: Did Jessica Clempner, the report’s lead author?

A. Who the hell knows because there is no link to the report.

But seriously, are ETF's and services designed for women going to bring in the other $674.5 billion?

Nonetheless, this story is likely to go viral because of the preposterous claims. Few will realize what happened. The parrots at Yahoo! Finance already picked it up, without comment or additional links, but did leave out the link to the Oliver Wyman advertisement.

Click-Bait Infomercial

There is no study, wild numbers, and a missing $674.5 billion out of an amazing $700 billion claim.

Instead there is a link to an Oliver Wyman advertisement.

What is this all about?

Cadman's article smacks of a paid-for infomercial, not so cleverly disguised with hype clickbait.

Addendum

Bloomberg modified the article and indeed did change $500 million to $500 billion.

As readers pointed out, it's still bullshit.

Carl: "Even if one company was ignoring women, or 10, or 100, some company would prosper by catering to them. That's how the free market works. It's absurd to think that, of the thousands and thousands of big and small financial services companies, not one would offer these products. What could be simpler? If she believes her story, she should invest her life savings into the opportunity she has uncovered. What could possibly go wrong?"

Webej: "$700 billion is a lot of money to generate from fee and transaction costs."

Mish Final Thought

Yeah right. Companies are leaving $700 billion on the table, and not one woman is smart enough to start her firm and go after it!

Somehow, this is the fault of men.

Mike "Mish" Shedlock

Comments (36)
No. 1-25
numike
numike

If we are remembered at all, I fear it will be as object lessons of the folly of knowing the price of everything and the value of nothing.

Ted R
Ted R

How in the hell could the writer of this absurd story prove anything in her article? The answer is she can't.

numike
numike

700 Billion? not 800 Billion? Tossing out numbers: "Customers were cheated in 21 % of grocery stores in Prague." https://twitter.com/DegenRolf/status/1187638418437804032

Sechel
Sechel

don't know the numbers but discrimination and/or ignoring any group of buyers is stupid economics resulting in lost sails. this goes to the couple refusing to sell their home to a black family or the 'christian' refusing to bake a cake for a gay wedding or the wasp golf club refusing to admit Jews. One can say that the marketplace can fix all evils but bigotry and misogyny are two stupidities that need the government to intercede, but this is best done via the courts and enforcing agreements. Hard to see how wall street not creating products for women fits that example but any company that doesn't understand that women invest differently than men will not succeed as well as one that does

Six000mileyear
Six000mileyear

If there really was that much money "lost", then the finance industry would have created a product to attract it.

Captain Ahab
Captain Ahab

We are missing a great opportunity for a Perfume and Panties ETF

SpeedyGeezer
SpeedyGeezer

Bloomberg News has lost the plot. $700bn is so much money it underscores the absurdity of their story!! They have such a strong foundation in market data that they have a captive audience. I have been a Bloomberg terminal subscriber since the 80's and their platform is unmatched. Sadly their news offering has become highly partisan and sensationalized. Maybe it will get better after Trump leaves office? Agree with @Six000mileyear : if there was $700bn per year, the invisible hand would have long ago met the need.

Webej
Webej

B$700 is a lot of money to generate from fee and transaction costs. That would mean there is Tr$14 or so in cash waiting around to be invested. This cash would now be stuck in deposit accounts (at least helping to fund banks), or stuffed in matrasses. Either way, this does not comport with what we know about deposit accounts and currency in circulation.

thimk
thimk

presidential election just around the corner and guess who just threw his hat in the ring ? more of this type of narrative to follow .

Carl_R
Carl_R

Even if one company was ignoring women, or 10, or 100, some company would prosper by catering to them. That's how the free market works. It's absurd to think that, of the thousands and thousands of big and small financial services companies, not one would offer these products.

Rather than complain about it, the author should be delighted, even ecstatic! Wow, what a unique opportunity! She could be rich beyond her wildest dreams! All she has to do is form her own financial services company, and show everyone else how to tap into these missed billions. What could be simpler? If she believes her story, she should invest her life savings into the opportunity she has uncovered. What could possibly go wrong?

soupcon
soupcon

The industry does ignore women. There are few women retail stock brokers for starters. When I looked for a portfolio manager for my portfolio I specifically looked for a women. ETFs that have stock portfolios that exclude environmentally harmful companies such as oil and gas extraction, chemicals, pesticides, etc would appeal to many women. ETFs that exclude war related stocks also would appeal as well. This is the tip of the iceburg as to how the investment industry remains mired in its dinosaur ways.

shamrock
shamrock

I don't know if it's an update or you misread the original but the article now states it is $500B, not million, in new life insurance premiums.

Aaaal
Aaaal

Perhaps those figures are calculated out into perpetuity.(guffah)

RonJ
RonJ

Reminds me of the TD Ameritrade, no to kale ad.

mrutkaus
mrutkaus

Hope you have a comfortable sofa.

Country Bob
Country Bob

Bloomberg's failed presidential campaign is already in very deep trouble. Bloomberg's treatment of women has been identified as a liability. That is what this article is really about.

MilaFishbein
MilaFishbein

Where did this information come from? Where to look at studies of this issue? That's it. Usually, sellers tend to focus on the average buyer. Yes, maybe there are more men in the statistics. But who said that if you focus only on women, they won’t lose even more?

Country Bob
Country Bob

The total outstanding life insurance business of MassMutual and Northwestern Mutual (combined) is about $550-600 billion... and those are two of the largest US based whole life insurers. (term life premiums are a lot smaller).

The two largest players (both mutuals with many women on their two boards) could double their business if this Oliver Wyman nonsense had any basis in reality. No one would leave $700 billion on the table, if it existed.

Actuarially speaking, women tend to outlive their husbands, and ergo couples tend to buy life insurance on the husband. No mystery here

Bam_Man
Bam_Man

Stopped reading immediately when Mish mentioned the article was from Bloomberg.

Casual_Observer
Casual_Observer

Bankers and banks have nothing to worry about as they will get bailed out at every turn. The FIRE industries are effectively a federalized function under the Fed Reserve. Eventually this will cause a bailout for pension funds as the politicians will bail out pension funds in exchange for what they are doing (and have done) for the banking industry. Clowns to the left of me, jokers to the right..

Stride
Stride

Welcome to the dark side, Mish-san. This diversity nonsense had jumped the shark. If women want to swim, they should get in the damn pool and swim. Nobody's gonna kick them out. Methinks too many liberal woman writers are happy being the perpetual victim.

Cocoa
Cocoa

its just more anecdotal ,editorializing, fake news

leicestersq
leicestersq

Obvious BS. What I am surprised though is that Mish seems to think that this is extraordinary. There are lots of fake news articles trying to put women above men in this that or the other. Once you notice one, noticing the pattern isn't so difficult.

Stuki
Stuki

If the Leech Army loses $700 billion in fees they could otherwise "earn" by picking random numbers, "investing" in perpetual motion machines with money levered risk free 100-1 with implicit taxpayer backing by The Fed and similarly enlightened drivel, that means women saved at least that amount by not being robbed as thoroughly as their husbands. Hardly anything to complain about.