Should You Choose a Female Financial Advisor?

Retirement Planning

Should You Choose a Female Financial Advisor?

Posted by COTO Insurance & Financial Services
9 months ago | February 11, 2019

Recently, some information surfaced that I found interesting, as a female financial advisor. So naturally I wanted to share this perspective with my blog readers!

I’ve been seeing a lot of interesting news about female investors versus male investors. And while it’s important to stress that both styles can be valuable at different times, there really are some clear differences between the sexes. Females tend to be more conservative, focus on the long term, and view financial matters from a more holistic perspective. Men, on the other hand, tend to take more risks and focus on parts of a portfolio rather than the whole*.

Of course, those study results (and others that replicate the findings) focus more on individual investors. How do these attitudes, combined with other known differences between the sexes, translate to a financial advisor’s skill set?

Research has shown that female advisors tend to focus on the family’s financial goals, over absolute investment performance**. You could say this boils down to listening to an individual family’s priorities, and helping them make decisions based around those factors, rather than focusing on simply “winning”.

Due to the female bias toward conservatism and long-term goals, female advisors were actually found to outperform males. Why? The women tended to focus on investments with a proven track record, or lesser-known but productive ones. Whereas men tended to take an active trading position, women chose solid options and stuck with them. This led to a whopping 69 percent difference*** in trading costs, in favor of the ladies.

Meanwhile, the guys demonstrated consistent overconfidence in their abilities. Ouch!

I certainly have found these study results to be relevant to how I conduct my business. When I sit down with clients, I want to hear about their goals and dreams, rather than simply attaching a number to their situation. I hope to address their concerns, and I aim to find a stable and relatively secure means of addressing those concerns.

Above all, I try to guide clients toward viewing their situation through a long-term lens. When we view retirement and other future goals as a marathon, rather than a sprint, we can make conservative but productive decisions to help you cross that finish line in due time.

If that sounds good to you, give me a call. We can get to know one another, and I’ll help you make the decisions that fit your priorities.

*Barclay Wealth and Ledbury Research, 2011
**https://www.theguardian.com/money/2018/nov/24/the-truth-about-investing-women-do-it-better-than-men
*** https://faculty.haas.berkeley.edu/odean/papers/gender/boyswillbeboys.pdf

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