The Evolving Landscape of Female Entrepreneurship

The world of female entrepreneurship has experienced significant change in recent years. With an increasing number of women taking on leadership roles and expanding their influence, new challenges and opportunities are emerging for wealth management and business growth. Alan Hooks, Head of Private Clients at Julius Baer International, the UK based global private banking group, and Sam Smith, entrepreneur, NED, and former Chief Executive of finnCap Group Plc, offer critical insights into the hurdles women face in managing their wealth and scaling their businesses. Their perspectives provide an understanding of the financial complexities that come with being a female entrepreneur, emphasizing the need for financial literacy, a supportive community, and tailored advice.

When it comes to managing wealth, both male and female entrepreneurs face some similar challenges, but Hooks highlights key differences in how women approach their finances. "Both men and women face some universal challenges that all entrepreneurs encounter in managing their wealth: they can lack confidence, feel they have a shortfall of knowledge, or do not have sufficient time," Hooks explains. However, he stresses that these are not insurmountable hurdles. "None of these are insurmountable, particularly with the right advisor to attend to their personal financial affairs," he adds.

The unique challenge that many female entrepreneurs face, according to Hooks, is a lack of financial confidence. Historically, women have not been exposed to investing or financial education in the same way men have, which often leads to a feeling of insecurity in managing their wealth. "As women increasingly generate and hold more wealth, a lack of financial confidence is one of the principal hurdles they face. They haven't benefitted from the same education in, or exposure to, the world of investing as it hasn't traditionally been geared towards them," Hooks explains. This lack of exposure often means that women can feel less self-assured in their financial decision-making, which can have significant implications for their long-term financial goals.

The issue of time is also an important factor for female entrepreneurs. "Time is also a factor here as entrepreneurs' lives are wholly interwoven with their businesses, which often means their personal finances are not their first priority," says Hooks. Balancing the demands of running a business while managing personal finances can be overwhelming, and it's not uncommon for female entrepreneurs to neglect their financial well-being due to competing demands.

Smith expands on some of the systemic challenges female entrepreneurs face, pointing out that the financial system was never designed with women in mind. "The system in which entrepreneurs operate was not built for women, it was built by men with connections and education, so as a female entrepreneur you do not know where to go, what to do, who to ask for advice, you're on the outside," Smith reflects. This lack of access to established networks and financial communities can present a significant barrier for women looking to navigate the world of wealth management. Even after reaching success, many women still find themselves isolated without the necessary support systems to manage their wealth effectively.

One trend that has emerged among successful female entrepreneurs is their desire to give back to their communities, and this is an area where wealth managers can play an important role. Hooks explains, "Research suggests that female entrepreneurs show a strong interest in giving back to their communities." He further highlights how wealth managers can help bring these philanthropic goals to life by aligning them with the client's financial strategy. "An advisor will help bring them to life through opportunities such charitable or philanthropic endeavors, often concerning female equality," he says.

For women who want to support causes close to their hearts, such as gender equality or women's empowerment, the role of the wealth manager is crucial in structuring their finances to achieve both business growth and philanthropic success. "However, they must have a suitably constructed investment portfolio giving sufficient returns to maintain their financial backing of these ventures," Hooks notes. This dual focus on business success and social impact is something that requires careful financial planning and strategic advice, and wealth managers are in a unique position to provide this support.

Smith agrees with the importance of giving back, but she also underscores the significance of building a lasting legacy. "There is not one female superscaler who doesn't want to give back, to try and ensure no other women goes through what they had to, or still lacking in confidence even though they have built a £100m turnover business," Smith shares. Despite their success, many female entrepreneurs still face the challenge of finding purpose in their wealth and desire to create an impact beyond their personal gain.

For many, the focus shifts from securing financial stability to creating a legacy that supports other underrepresented groups. "Achieving financial security is one thing, but building a legacy is very important to these women – to be able to support other underrepresented segments, not just women, to succeed," says Smith. This desire to support and uplift others is often a driving force for female entrepreneurs, influencing their business and wealth management strategies.

Hooks and Smith both agree that when it comes to wealth management, there is no one-size-fits-all strategy. According to Hooks, the approach to managing an entrepreneur's wealth should be as unique as the individual. "The strategy we would recommend for a successful entrepreneur would not look fundamentally different whether they are male or female, as we cater solely to the needs and objectives of each individual," he says. It's all about understanding the specific needs and goals of the client, both professionally and personally. "Giving the right advice and building the most appropriate strategy for a client means understanding each part of their life, from their family, their lifestyle, and their own goals, to their business plans and ambitions," Hooks explains.

For female entrepreneurs, a holistic approach to wealth management is essential. "Their assets can then be structured appropriately to provide enough for each requirement and adjusted when necessary," says Hooks. This adaptable approach ensures that both personal and business-related goals are met, allowing entrepreneurs to focus on scaling their businesses without losing sight of their financial well-being. Smith also emphasises the importance of personalized strategies, particularly for women who are scaling their businesses in a world that was not traditionally designed for them. "We are only just starting to get statistics on how female entrepreneurs grow their businesses to superscale. The trends emerging in this space are really new." As more data becomes available, the key to success will be understanding the factors that contribute to women's success in business, which are often different from those in male-dominated spaces. While there isn't a particular sector that female entrepreneurs are dominating, Smith points out that many of these businesses "provide a different take or approach or serve a customer group that wasn't previously catered to."

Smith also highlights the importance of building a supportive ecosystem for women entrepreneurs. "There is really strong work being done on growing the ecosystem for female-led businesses, which helps to encourage women to start and scale businesses, as well as share their experience and expertise," she explains. This ecosystem is crucial for fostering a sense of community and support among women entrepreneurs, and it's helping to reshape the future of female entrepreneurship.

Both Hooks and Smith emphasize the importance of financial education and community support for women entrepreneurs. For Hooks, the increased representation of female advisors in wealth management is a positive step forward. "Ever-increasing numbers of female relationship managers, wealth planners, and investment advisors mean that wealthy women are more readily seeking advice and benefitting from expertise regarding their personal finances," he says. This change is helping to build confidence and knowledge among women, allowing them to take more control of their financial futures. Smith agrees that financial literacy is key to empowering women to manage their wealth. "We need to be educating women as a group in financial literacy from a young age and talking about it in a relatable way," Smith says. Financial education, she believes, will empower women to make informed decisions about their businesses and wealth. "Only then will female founders become more confident, more represented, and likely to inspire others to do the same," she adds.

The landscape for female entrepreneurs is rapidly changing, and while there are still significant challenges to overcome, there is also a growing sense of possibility. There is a need for tailored, holistic strategies when it comes to managing wealth, as well as the importance of education and support for women entrepreneurs. As more women enter the entrepreneurial space and scale their businesses, the focus on legacy-building and social impact will continue to drive their decisions. The financial systems are evolving to better support women, and with the right guidance, female entrepreneurs can thrive both in their businesses and in their wealth management strategies.