Even in Finance Men are from Mars and Women are from Venus
Men and women are different in a lot of ways. The question is, are female advisers different from male advisers and which one can help you make better financial decisions?
Recent studies have shown that female investors are better than male investors. According to the studies, women are better investors because they are more patient and more conservative. A Barclays Wealth and Ledbury Research study suggests that the female psychology is better suited than male psychology when it comes to investing. This study found that women’s annual risk-adjusted returns were nearly 1% higher. Female investors were found to be more conservative and more disciplined. They are less impulsive and are more likely to employ a buy-and-hold investing strategy. Male investors on the other hand, are more aggressive. They are 45% more likely to make trades.
Eons of experience could also be a factor as to why female investors have a different way of handling money. Women have been running households for generations. Women have a tendency to be more cautious about making financial choices which is why female investors tend to see the bigger picture.
These studies, however, do not pertain to financial advisers. Being better at investing does not automatically mean women are better financial advisers. When asked whether or not financial advice from a female adviser differs from that of a man’s, top female advisers, say no. According to them, there is no gender gap when making choices in which stocks to pick, or how to diversify a portfolio. Both male and female advisers follow an established investment theory that drives their decisions. But that’s not to say that female financial advisers and male financial advisers are the same. The difference between a female financial adviser and a male one lies in how different they relate to the client. Women tend to take a more holistic approach at financial advice.
Women in general, relate differently to people. Women communicate differently to their clients, giving them a unique understanding of their client. They are more sensitive and thus more likely to understand and appreciate the financial aspect of a client’s life. Women have the ability to pick up on non-verbal cues from the clients which enables them to make investment recommendations that are more holistic and more suitable to the client’s needs.
A huge part of a financial adviser’s job is getting to know the client and uncovering the client’s needs. In order to recommend suitable investments, the financial adviser must discover and understand not just the client’s needs but also the client’s investment horizon, investment experience, risk appetite, and objective. Which is why probing is one of the first things a financial adviser does. During conversations with a client, female financial advisers are able to gather more data and have better understanding of the client and his/her needs. Women therefore, have the ability to see a clearer, bigger, and deeper picture of their client’s financial needs, enabling them to respond accordingly and dish out a more suitable financial advice.
This type of financial planning and input is critical when deciding how and when to finance your small business. A female adviser would be a great place to start if you are thing about getting a business loan. Whether you are looking to expand your business or just trying to get control of your operating expenses sitting down with a woman could possibly be the difference between success and failure.
It is important to understand that we are all individuals and each person has a different perspective. We all have different educations and experiences so some personalities might be very good financial advisors for one person whereas a different style might be better suited for another. Take your time and do your research and it might serve you well to get more than one opinion, just make sure one of those opinions is from a woman.