Younger women under the age of 45 who work with advisors are twice as likely than older married women to be a financial decision maker in their family, four and half times as likely as women over 55 to consider themselves knowledgeable about financial products and services and three times as comfortable making decisions on their own, according to Merrill’s research.
But the industry had not yet adjusted to the changing realities. Reviewing analysis that tracks eye movement, Merrill found advisors focus over 60% of their time on the man in meetings with a heterosexual couple.
Merrill also found miscues in live simulations between investors and advisors that included assuming the man was the financial decision maker, viewing women as more risk averse, and concluding a couple’s finances were merged and jointly invested.
“Unconscious bias and gender bias exists, and being able to be transparent about that as a firm and industry is only going to make faster progress,” Lindsay Hans, Merrill Lynch Wealth Management Division Executive.
Though women are more likely to recommend an advisor than men, based on Merrill’s research, they are also more likely to switch advisors after a bad experience while men are more likely to confront the advisor or file a complaint.
At Merrill, Hans says the firm has trained 20,000 employees about unconscious bias and awareness of its unintended effects, as well as making structural changes—like changing the language on new account forms so joint accounts don’t include words like primary and secondary account holder designations.
The research found fewer miscues when advisors met with women alone. Women also tended to have higher risk tolerance—2.5 times—when working with a female advisor, and made more of their own decisions while working with a female advisor, while those who worked with a male advisor were more likely to defer decisions to him, according to the research.
All of this comes against a backdrop where the Covid-19 pandemic has heightened financial concerns, with women taking a harder hit in terms of job losses and having to take on more of the child care and home schooling.
Even while working from home, a survey of investors with at least $250,000 in investible assets from UBS Wealth Management in July found women taking the lead on home schooling, child care, cleaning and cooking—potentially reinforcing entrenched views.
The optimistic view: As the pandemic forces a reassessment of things like working remotely and commuting to financial considerations, it also opens the discussion about finances and who is at the table making the decisions, Hans says.
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