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The financial services industry has long been male dominated. In fact, in 2018 the CFP Board reported that 76.83% of Certified Financial Planner professionals were men and only 23.16% were women. In this male dominated field, do women feel comfortable working with a financial advisor? According to recent research from Spectrem Group 61% of women use a financial advisor, while only 56% of men use an advisor. Seventy percent of women also use only one financial advisor, while men are slightly more likely to utilize more than one financial advisor. Why are women more inclined to use a financial advisor?
Men are more likely to feel that they can do a better job of investing than a professional, according to Spectrem Group. Forty-seven percent of men who do not use an advisor make that choice because they feel they can do a better job of investing than a professional. That is in stark contrast to less than a third of women who feel that way. The women that currently do not use an advisor are more likely than men to identify not having enough assets to warrant an advisor or not being able to afford an advisor as reasons why they have not begun a relationship with a financial advisor. Even among this group of non-users, women are more likely to consider using an advisor at 20 percent, while only 13% of men who do not currently use an advisor would consider using one in the future.
Women are more likely than men to be looking for an advisor that is proactive in contacting them regarding anything important as it relates to their investments. There is a higher level of importance on professional designations such as CFP or CFA for women than men, 78 percent to 71 percent, respectively. Cultural background of an advisor and gender of an advisor does not matter much to either genders when selecting a financial advisor.
The level of reliance on an advisor is higher among women than men as well. Women are more likely to be Advisor-Dependent or Advisor-Assisted than men. Fifty-eight percent of women rely on and trust their advisor for the vast majority of their financial needs, in comparison to 52 percent of men who feel that way. Men are more likely to have done their own investing and they are more comfortable with making financial decisions without the assistance of a financial advisor.
Women feel far less knowledgeable about financial products and investments than men, and they are also more likely to be seeking security as their primary portfolio objective. Men on the other hand are more likely to feel they are fairly or very knowledgeable, allowing them to be more comfortable with decision making without an advisor. Women also tend to be more conservative investors according to Spectrem Group.
Another reason women use financial advisors more than men is that they do not enjoy investing at the same level as men and they are less interested in being actively involved in the day-to-day management of their investments, which paves the way for a relationship with a financial advisor that they trust to take over many of those decisions.
Financial professionals need to take notice that women are choosing to use financial advisors more than men and they rely upon their advisor more than men do as well. The fact that women do not care about the gender of their financial advisor is very helpful given the vast gender gap that still exists in this industry. Any financial professional who wants to work with female investors needs to be aware that these female clients will expect excellent communication and will rely upon their selected advisor for many decisions. Women are also a bit more loyal and once they find their chosen advisor, they are less likely to change to another advisor, making them an ideal client.
Related: How Young is Too Young to Have a Financial Advisor?