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Financial Planning How to tailor advice to men and women differently?

How to tailor advice to men and women differently?

Women of all ages approach an advice relationship more cautiously than men.
Team Cafemutual Aug 5, 2016

As an adviser, it is necessary to understand the subtle differences between the needs and expectations of men and women in an advice relationship. This will help financial advisers tailor their approach to each gender at both the initial and subsequent stages of the adviser client relationship.

A combined study by Association of Financial Advisers (AFA) and The Beddos Institute, a consulting firm in US, shows women of all ages approach an advice relationship more cautiously than men, highlighting the importance for advisers to understand and deliver on specific client needs and concerns in order to win the right to become that person’s financial adviser. This research was conducted in Australia among 399 investors having financial advisers.

Interestingly, younger people seeking an advice relationship tend to engage a financial adviser faster than older adults. Most notably, young men are the fastest of all to engage a financial adviser, taking only 1 month, twice as fast as young women potentially reflecting impulsivity that often characterises younger males.

Retirement planning is the primary event that leads both men and women to seek out an advice relationship, five to six times more common than anything else. Not only is this the primary advice trigger but it is also the key financial advice service used by clients. While there are no differences in the use of retirement planning by men or women overall, more Gen Y (people born in the year 1982 and 1994) women use their adviser for retirement planning than Gen Y men, indicating a greater propensity to plan for the future among younger women.

There are many other triggers that prompt men and women equally to seek out financial advice and many advice services that are commonly used by both genders. Not surprisingly, both the advice trigger and services used are affected strongly by the life-stage of an individual. Life-stage and gender come together to create two very distinct pictures of the drivers to engage an adviser and the services they need. For example:

  • Starting a family provides more of an impetus to seek out advice for Gen Ys (both women and men)
  • Death of a loved one is more of a trigger

Furthermore, separated and divorced women use their adviser more for budgeting than married women suggesting that, in the absence of a partner, money management skills become more important. In contrast, separated or divorced men tend to focus more on establishing good money habits reflecting a potential change in financial discipline when a partner is not there to support their financial decision-making.

What is your role?

Providing services that attend to the specific needs of women (e.g. financial education) and men (e.g. setting goals and wealth creation), in addition to the needs shared by both genders will drive client value and is likely to increase loyalty and the breadth of services requested. Considering generational differences in providing advice is likely to generate similarly improved outcomes for clients and their adviser. Here are some tips for you:

  • Understand each client’s own specific trigger for seeking advice and respond to this in the early meetings.
  • Deliver advice that is tailored to the unique needs of each client, especially where clients seek advice as a couple and may have different needs and levels of financial understanding.
  • Refer on if a client is looking for a service that you do not specialise in.
  • Segment advice offerings by gender/demographics.
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