In a 2013 Spectrem research study, investors were asked to select a preferred financial advisor from a group photo of eight people, four men and four women, with obvious differences in ages. The oldest male in the photo was chosen by 35 percent of investors, followed by the next oldest male with 26 percent. Two women in the photo received 12 percent of the vote.
While there was no right or wrong connected to the question, research shows that investors should consider female financial advisors a little more strongly.
There are facts related to men and women and their attitudes toward risk that require no study. Women are more likely to wear seat belts; men are more likely to drive fast. Women go to the doctor regularly; men go only when their bodies tell them to.
Aversion to risk plays an obvious role in investment decisions. Success in investments can be attributed to both an aversion to risk as well as a willingness to risk.
In Spectrem’s Millionaire Corner study Investment Attitudes and Behaviors of High Net Worth Women versus High Net Worth Men, 61 percent of men said “taking risk’’ was a factor in their obtaining wealth, while 43 percent of women said the same thing. Asked to respond to the statement “I am willing to take significant investment risk on a portion of my investments in order to earn a high return on my investment”, 43 percent of men and only 28 percent of women agreed.
Women are also more likely to credit their financial advisor for their accumulation of wealth. The Spectrem study showed that 43 percent of women credited decisions made by their financial advisor while only 33 percent of men did so.
According to the Spectrem study, 78 percent of women use a financial advisor of some sort, while only 72 percent of men do. Eighty-eight percent of men consider themselves either knowledgeable or fairly knowledgeable about financial products and investments, while only 63 percent of women feel that way about themselves.
Fifteen percent of women consider themselves advisor dependent and that jumps to 23 percent of women in the Ultra High Net Worth wealth segments, with a net worth between $5 million and $25 million. Only 11 percent of men are advisor dependent, and that percentage is consistent throughout wealth segments.
The desire for information from others indicates patience in investing, which can lead to avoiding mistakes made by rushing into an investment.
Risk aversion, or its opposite, the thrill of risk, plays a role in the feelings men and women have toward investing in general.
The Spectrem study reveals that 54 percent of men enjoy investing while only 36 percent of women admit to enjoying the investment game. Women remain consistent among wealth segments, while 68 percent of investors with a net worth of $5 million or more say they like investing and do not want to give it up.
Obviously, men get something out of investing that women do not.
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