Women are handling the money in more than half of American households. Yet, around the same amount don’t have a financial advisor.
Among those who have discussed finances with a pro, research suggests it hasn’t gone well. The vast majority walked away feeling misunderstood.
At the same time, there’s a huge gender imbalance within the industry. Around seven in 10 advisors are male. In turn, some companies are scrambling to attract female advisors in order to capture a share of this underserved market.
But new research suggests the solution is not actually that simple.
In fact, a study published recently in the Journal of Financial Planning found no evidence that females or males prefer to work with a financial professional of the same sex.
Data instead revealed that females strongly prefer one type of professional. Far more women favored financial planners (60 percent) over financial advisors (40 percent)—regardless of their gender.
“If the financial services profession wants to attract more female clients, it is important to understand how females view these practice types and whether they have a strong preference between the two,” researchers noted in the report, entitled Gender Bias and Practice Profiles in the Selection of a Financial Adviser.
Results indicated that each gender associated certain attributes with each profession. For women in particular, that’s what influenced their decision to go with a planner as opposed to an advisor.
“When it comes to financial planners, collaborative and easy to talk to/good listener were the attributes females associated with this practice type compared to males,” the report noted. “Given females’ relative lack of investment confidence (Barber and Odean 2001; Lundeberg, Fox, and Punccohar 1994) and experience, perhaps it is no surprise that the practice type they view as providing a collaborative approach with someone who is easy to talk to is a more inviting option.”
Males, on the other hand, showed no preference for either type of advice, despite also categorizing the two practices differently, leaving researchers to suppose their “ambivalence may be because of their higher degrees of investment confidence and experience as compared to females.”
Jessica Claeys is an editor, writer, and graphic designer, who has been creating both print and digital marketing and communications content for 10+ years.
Jessa Claeys is a licensed insurance producer in the state of Colorado and an insurance editor for Bankrate. She currently covers auto, home and life insurance with the goal of helping others secure a healthy financial future. Jessa has over a decade of experience writing, editing and leading teams of content creators. Her work has been published by several insurance, personal finance and investment-focused publications, including BiggerPockets, 401(k) Specialist, BP Wealth and more.