Making inclusion work for your firm
- To understand behavioural biases.
- To learn how adapting methodology can help your business.
- To gain an understanding of how to build your client base across genders.
- To understand behavioural biases.
- To learn how adapting methodology can help your business.
- To gain an understanding of how to build your client base across genders.
Whether they are male or female, financial advisers are prone to unconscious bias when it comes to their female clients.
Inadequately serving half the population is not only unfair, it’s also potentially driving business away – and leaving money on the table.
Research from the Center for Talent Innovation (CTI) found 44 per cent of women in the U.S. do not have a financial adviser. That translates to a significant amount of unmanaged money when you consider that women control $11.2 trillion of investable assets in the U.S., according to the same study.
This missed opportunity doesn’t just affect the bottom line of financial advisers. Women without advisers are more likely to face financial challenges.
They hold 20 per cent of their assets in cash and are often underinvested compared to women with advisers, who hold an average of 9 per cent in cash.
Unconscious gender bias is even more pronounced in the financial advising world, since women are a relatively new client segment.Often referred to as the “investment gap,” additional cash and underexposure to the markets compound the other gender gaps – the pay gap and the retirement gap.
Women’s longer life expectancy exacerbates the problem, resulting in senior women in the US falling into poverty at alarming rates.
The upshot is that a large number of women have an unmet need for prudent financial advice. This presents a win-win opportunity for both financial advisers and women – but only if advisers first address the problem of unconscious bias.
Too many advisers do not serve women well
More than half of women do have a financial adviser, but that doesn’t mean that they are well-served. Forty-four per cent of women who have a financial adviser say that their adviser does not understand them, according to the CTI.
The situation is even bleaker for young and high-net-worth women: 51 per cent of women with $1m in assets and 72 per cent of women under 40 feel misunderstood by their adviser.
Many women feel that their adviser is trying to sell them something, rather than listening to their specific needs. In an industry where client satisfaction directly impacts the bottom line, financial advisers are not intending to mismanage their female clients; instead, it is likely the result of unconscious behaviour.
Up to 95 per cent of the mind’s function is unconscious. Scientific analysis posits that 11m bits of information barrage our senses each second, but our brains’ maximum capacity is less than 50 bits per second.
