Article by Phil
Should female financial advisers treat women differently from men? Well, according to the Pew Research Centre the answer is yes. Because they think and act differently from men.
In their latest survey of women’s finances, they found that:
- 55% of cash ISAs are held by women
- 50% of landlords in the UK are now women
- There are three times as many women in long term care than men
- 90% of women said they wanted holistic advice rather than transactional advice
- 70% said that they would change their financial adviser when their partner died
- 65% of women are interested in ESG investing
- BUT the average income for women is £23,600 against £28,700 for men.
- Women’s pensions are on average worth 40% less than men.
In the US 60% of wealth in now held by women with an estimated value of $32 trillion!
But, another survey by Handelsbanken showed that women are also less confident about their finances than men. The survey found that:
- Only 29% of women were confident to offer financial advice to their family and friends
- Whilst two thirds said they were “worried” about their finances
- And one third of women say that they are “bad” at organising their finances.
But things are changing.
- 76% of women under 30 have a pension, compared to only 59% of men.
As female financial advisers, we already understand how women think. But we always make sure that we advise both partners in a relationship. We never deal with the husband or wife on their own. That’s because we only offer a holistic advice proposition.
We think that this is a healthy approach, especially considering the FCA’s new Consumer Duty requirements are set to be introduced later this year.
These will require financial adviser firms to take a further step in their protection of customers interests. The new Consumer Duties will include the requirements to:
- Take reasonable steps to avoid causing foreseeable harm to customers
- Take reasonable steps to ensure that customers can pursue their financial objectives
- To act in good faith
These are over and above the current requirements for firms to Treat Customers Fairly.
Firms are now considering what they need to do extra to implement these new protections. As part of this process they need to consider the language used in the financial services sector and how much customers actually understand. Latest research by Definition Consultants asked customers specific questions. This is what they found:
- Only 57% could identify the correct explanation of inflation
- Only 50% correctly understood what the APR was.
- 20% said they didn’t understand letters from their Bank.
- A third said they had paid more for credit than they thought they had calculated.
The findings suggest that customers don’t understand as much as firms think. This means that firms need to consider their use of language and the ways in which they explain products and services to customers more clearly. This may also apply to female financial advisers in a different way to male advisers.
Hopefully the Consumer Duty will make this happen.
