Women Financial Advisors: Too Few, But Worth the Search
They tend to communicate better with female clients and to offer holistic advice
A Merrill Lynch study found that male financial advisors, though clearly on the record that they treat all clients equally, are more likely to come to the table with some embedded stereotypical assumptions, such as assuming the man is the decisionmaker in the relationship, assuming women are more risk-averse, and assuming women are less knowledgeable than men about investing.
The research found that there were an average of 10 such “miscues” on the part of advisors in a 30-minute session with a heterosexual couple, with male advisors committing miscues at twice the rate of female advisors.
That’s just one reason why it’s not a bad idea for women — and, indeed, for a male-female couple — to seek out a woman as a financial advisor. It may require some looking, of course. Fewer than one in four certified financial planners (CFP) is a woman, and fewer than one in five financial advisors is a woman.
Female clients bring a gender bias as well
When it comes to relying on an advisor to make the financial decisions, men are equally unlikely to abdicate that responsibility regardless of the advisor’s gender: 27% said they rely solely on a male financial advisor to make the calls, while 26% of men said they relied solely on female financial advisors to be the decision-maker.
The story is different for women. When working with a female advisor, 32% abdicated all decisions, yet when working with a man that rose to 40%. That also played out at the other extreme: When working with a female advisor, 38% of women said they “make most of my own decisions.” When working with a male adviser, 18% of women said they make most of their own decisions.
Gender of the advisor also impacts how women size up risk taking. When working with a female advisor, female clients were 2.5 times more likely to say they are comfortable taking on risk, than when working with men.
Finding the right advisor
For single women, the takeaway here is that putting in the elbow grease to find a female advisor could be worthwhile. Not because a female is better. There is nothing to suggest the advice is any different based on gender. But just that a woman may be a better fit.
Especially if what you are looking for is a holistic, cover-all-the-angles approach to making sense of your entire financial life, and not just investing advice. A new study commissioned by the CFP Board found that female CFPs reported a higher percentage of their clients receiving advice on retirement planning, insurance, estate planning and taxes than was reported by male CFPs surveyed.
It’s also something husbands and wives should consider. Again, not because the advice is necessarily better, but because it could be a better fit. Wives tend to outlive husbands. That is just another reason why all women need to engage right now. Decisions made today will likely impact how she is able to navigate that longer life. If it is easier to dive in and engage working with a female pro — and bring more confidence to the task — that seems like it could pay off today and down the road.
That said, while not necessarily like searching for a needle in a haystack, finding a female pro taking on new clients isn’t exactly easy in a field so dominated by men. Put out the word to friends whose financial life seems similar to yours for references. Or spend some time noodling through the searchable databases for the National Association of Personal Financial Advisors, the Garrett Financial Network and the XYPlanning Network.
Ellevest is an investing and financial planning firm run by women for women. It recently passed $1 billion in assets it manages for clients. Ellevest has a series of affordable ways to get the advice you need, from a broad financial plan to help in reviewing your investments, upping your career strategy, or offering insights on budget challenges.