Financial advisers not working for women
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Most women love to chat. Yet for some reason we just don't like to talk about money.
As my Aunty Bun used to say, "One thing I've learned about money is to never discuss wealth, or lack of it, with friends. Friendship transcends money."
Wise words from Aunty Bun, but benchmarking is an embedded behaviour, and we're competitive too, even around a taboo topic like money.
Last year, my team at EnrichMe pulled together more than 300 women from a wide range of social circumstances for the Kitchen Table Series. In a number of different homes we drank wine, ate chocolate, and debated finance in the name of research and collaboration.
What we found from these groups was a universal view that men are more likely to seek professional financial advice than women – mostly because women don't trust advisers.
Women are responsible for more than 80% of consumer purchasing decisions, earn significant incomes and are founding businesses at an exponential rate. But for some reason, we're largely avoiding professional advice. This is not because we lack interest in the topic, (sorry misinformed misogyny, you have no place here), but rather due to a lack of faith and trust in the integrity of advice.
Not one of the ladies with whom we talked in depth said they would trust an adviser to deliver unbiased advice. To boot, all but one of our sample believed a financial adviser from a bank would put their own interests before that of the client if it meant they could meet their performance indicators by selling a bank product. Ouch!
Whether or not you share the cynicism, perception is a real problem for the advice industry. In turn, a lack of quality advice and financial education has wider implications for the future of our economy, especially with women living longer than men.
We need to know how to manage money effectively – not just to pay bills, although that's a good start, but to get smart about funding our longer lifespans and greater health costs without working ourselves to a frazzle. With the current economic climate shifting the balance of power towards greater institutional ownership of advisory firms, I'm concerned for the future of the sceptical women out there who avoids advice.
There's an opportunity here for all concerned. If any advice group is prepared to step up and deliver what we want, ethically and professionally, in a way with which we women can feel comfortable, then perhaps some faith can be restored. Advisory firms must dispense with out-dated commission and asset based business models and their own oftentimes greedy income aspirations, to provide a great, professional service. Why not start properly self-regulating too, while you're about it, so that compliance and professional indemnity costs can descend and the cost line fall. Meanwhile, there's scope to name and shame the shonky players.
Firms could also better use free technology to scale their businesses more effectively; one adviser I spoke to recently was floored when I suggested we meet via Skype for half an hour rather than make a three hour round trip into the city. Unbelievable.
I know some professionals who are really trying. But such changes are not widely cutting through, just yet – perhaps because those with larger marketing budgets are drowning them out.
We were fascinated by the findings of our Kitchen series, but not all that surprised.
Share your ideas below. How can the advice industry better work with women?
I don't manage money for anyone except my family, nor do I give financial advice, and my opinions are my own unless stated otherwise. My writing should not be construed as general or personal advice. You should consider obtaining independent advice before making any financial decisions.