Women are invisible no more when it comes to financial matters — and advisors of both genders may be giving them short shrift without even realizing it, according to a study by Bank of America Merrill Lynch of advisors and investors that was released today.
Seeing the Unseen: The Role Gender Plays in Wealth Management explored not only advisor behavior and language, but how women experienced financial relationships and some of the changes already taking place. The study included a survey of 4,000 investors and observation of real advisor-client meetings.
Despite the fact that “women’s experiences have undergone a series of tectonic shifts over the years as they’ve made enormous gains in economic power,” the study found “gender bias still exists in financial advisory relationships, but the perception and effects differ among women.”
In fact, nearly one in 10 female investors had reported a “negative experience with an advisor based on a gender stereotype.”
When researchers talked to advisors, “it was clear that they understood the kinds of negative experiences that women encounter, but the financial advisors had a hard time recognizing such behavior in themselves,” according to the paper.
But watching the advisors in action showed they were guilty of making gendered assumptions.
In meetings with clients, both male and female advisors “committed miscues” in assuming that 1) the man is the decision maker in the relationship, 2) women are more risk averse, 3) a couple’s finances were merged and jointly invested, and 4) the woman in the couple was less knowledgeable about investing than the man.
Indeed, the study found these assumptions were often untrue in reality, particularly for younger women.
Younger married women reported more involvement with the family finances than older married women. In fact, married women under 45 are roughly twice as likely (63% vs. 37%) as older married women to be a financial decision-maker in their family, the study found.