Women and advice

Contents

1. Key points

2. Women tend to have greater barriers to advice

3. Does an adviser’s gender matter?

4. The drivers of engagement

5. Adviser Takeaways

Women tend to have greater barriers to advice

Our survey reveals unequivocally that women have greater initial concerns about advice. Indeed, we find some surprisingly large differences.

• 47% of women worry about trusting those managing their investments versus 31% of men
• 1 in 3 women fear being judged for past mistakes versus only 1 in 5 men
• Over half of women are concerned with losing money versus 37% of men
• 43% of women do not have time to actively manage investments versus 31% of men.

Trust is the foundation stone of any enduring adviser-client relationship. The fact that 47% of women do not trust investing versus only 31% of men, and women feel they might be judged about past financial mistakes (1 in 3 women versus only 1 in 5 men) are surprisingly strong results.

We have to consider these findings in context: the wealth industry is still tilted towards men and has a skew towards transactional approaches that can resonate more with men. This can be compounded by outdated gender stereotypes, some of which operate at an unconscious level. For example, unconscious bias may mean advisers unintentionally focus more attention on the man in meetings with mixed sex couples.^[1]

It could also mean assuming the man is the decision-maker or that women are less knowledgeable about investing. Or that a couple has joint finances; our survey shows only 30% of investor couples have completely joint finances, 47% have some joint finances while 20% of couples have separate finances. Similarly, our finding that women have greater fears about being criticised for past financial decisions can be understood through this lens of unconscious gender bias. And, it underlines how carefully advice needs to be delivered by male advisers to female investors.

54% of women versus only 37% of men are concerned they would lose money compared to keeping cash in the bank. As our first article points out, women show higher aversion to losses and pay more attention to negative outcomes than men, who tend to be more opportunistic. Yet, women’s higher aversion to losses need not be a barrier to investing. Rather, it is a key insight for advisers to engage with women, particularly in conversations about capacity for loss and market composure.

Women are more concerned than men about not having enough time to actively manage their investments. Given the many demands on women who are juggling careers, career breaks, parenting, family and household responsibilities, this is hardly a surprising result.

Again, it is not necessarily a barrier to advice however, since the corollary to this result is that, once convinced of its value, women are more likely to outsource the job of investing to an adviser. This is consistent with the finding that 51% of advised women do not have time to actively manage their investments. Men are more likely to be non-advised ‘hobby’ investors as well as ‘very engaged’ clients. And, when we consider this result in the light of research that indicates women are more likely than men to recommend their adviser,² it suggests that advisers who put in the groundwork to win female clients can reap the rewards of long-lasting advice relationships.

Does an adviser’s gender matter?

Is an adviser’s gender a barrier to advice for women? The bare data suggest it is not a significant issue, but the data for advised women suggests it probably matters.

82% of men and 73% of women feel that an adviser’s gender makes no difference. Interestingly, unadvised women show a greater degree of gender ambivalence, while advised women have the least agreement. This suggests adviser gender matters a little more in practice than it does in theory, with poor outcomes likely driven by unconscious bias in interactions with female investors.

18% of advised women would feel more confident if their adviser was a woman, but a further 18% would prefer a man. So, the advice industry certainly needs more women, but it would appear there is still plenty of scope for male advisers to build trusted relationships with women clients. Age is an interesting factor too: older women, for example in the 65-74 bracket, generally showed greater agreement (85%) that gender does not matter, while younger women in the 35-44 cohort showed the highest preference (27%) for female advisers.

The drivers of engagement

It turns out that women are a bit more demanding than men when it comes to seeing the value of advice. However, these statistical differences are not as large as those concerned with women’s greater worries about financial planning.

Nevertheless, the fact women have very high levels of agreement on ‘seeing proof their fees provide for value’ (92%) and ‘feeling they [advisers] would listen intently to, and understand, my needs’ (92%) both reinforce the need for advisers to build trust and establish the emotional context behind women’s financial objectives and their personal investing journeys. This can help to inform the way in which goals can be met, while emphasising the peace of mind and emotional benefits that advice can deliver in addition to an attractive value-for-money outcome.

Some of our age related results point to a generational shift in preferences, similar to what we saw in the stronger preferences of young women on adviser gender. While 76% of women feel that ‘knowing they [advisers] will save me time’, agreement was lower amongst older women and higher amongst younger women (92% of 26-34 year olds), underlining the impact of greater career and family demands on the time of young women. We see a similar pattern on ‘knowing they would instruct me on exactly what to do with my wealth, with 98% agreement among young females versus 85% among young males (26-34 year olds).

Adviser Takeaways

• Women want advice but have greater concerns around trust and being judged.
• It’s important for male advisers to be aware of a higher risk of unconscious gender bias in advice conversations with women and mixed sex couples.
• Be careful not to assume that: the man in a couple is the decision maker; a couple has joint finances; women have less investing knowledge; women are more risk averse.
• Face into women’s greater concerns around loss by giving greater weight to the ‘EQ’ of investing alongside the traditional ‘IQ’ tools.  This might mean emphasising the peace of mind investing provides when showing projected returns with cashflow modelling tools.

¹An eye tracking study of financial advice meetings found that both male and female advisers focused 60% of their time on men investors when meeting heterosexual couples. Merrill, 2024, ‘Seeing the Unseen: the role gender plays in wealth management’.

² Merrill, 2024, ‘Seeing the Unseen: the role gender plays in wealth management’.