Some estimates show that 15 to 20% of all financial professionals are women.1 In America, women control about $14 trillion in assets today, and this number is expected to grow.2 Though men historically have taken a more aggressive approach to investing than women, empirical evidence shows that women investors consistently outperform men.3 What values might women financial advisors offer, and why does this matter to women investors?
Statistically, American women have longer average life expectancies than their male counterparts4. It is essential now for women to secure financial futures longer than their mothers had to plan. Advisors who themselves are women have insight into this concern in a different way than their male counterparts, simply due to the gender-based differences in how long we know we need to plan.
Engaging a trusted financial advisor includes establishing a new trusted relationship. While building trust and rapport may be different for different people, it’s an intimate process. Whether men or women are on either side of the advisory relationship, shared life experiences do matter. And for many women, life experiences lead to hesitancy to ask questions. For women (or men) who may be reluctant to ask clarifying questions, there may be advantages working with a female advisor.5
Financial planning involves delving into personal goals and values. People differ in their goals and objectives, level of financial education, and comfort with investments and financial planning. One size doesn’t fit all. However, most women do seek out authentic relationships, and many want plans tailored to their unique situation. According to a July 2020 research report,6 women understandably are more concerned than men about the risk of outliving their financial assets; more concerned about being able to cover health care expenses; and want more help with cash management and other day-to-day finance needs. Therefore, And many women seek out female advisors for financial guidance, highly personalized comprehensive planning, and financial education for themselves and for their children and grandchildren.
People seeking financial advice while going through a transition or a difficult time such as a divorce, retirement or losing a loved one may want guidance from an empathetic listener who truly can understand their concerns, lifegoals, and financial objectives. Women tend to score higher on empathy measures.7 Including patience. And, women financial advisors may tend to understand what other women deal with regularly, from workplace sexism to socioeconomic concerns, and may provide advice that takes such factors into mind. 8
Female executives tend to know when to delegate responsibility in and out of the office. When it comes to delegating with regard to financial matters, some women may be more comfortable entrusting those responsibilities to another woman.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Socially Responsible Investing (SRI) / Environmental Social Governance (ESG) investing has certain risks based on the fact that the criteria excludes securities of certain issuers for non-financial reasons and, therefore, investors may forgo some market opportunities and the universe of investments available will be smaller.
All information is believed to be from reliable sources; however LPL Financial and MacNaughton & Associates LLC make no representation as to its completeness or accuracy.
This article was prepared by WriterAccess and Ann L. MacNaughton, past Council Member, State Bar of Texas Women and the Law Section (1988-92); Former Women’s Advocate, University of Houston (1973-74).