Investment News, May 26, 2016, Liz Skinner - Affluent Americans trust older white men most for financial advice: Spectrem
Line up a cross-section of Americans, and wealthy individuals are most likely to pick out the older white male as their choice for a financial adviser, a new report finds.
About a third of those who have between $100,000 and $5 million to invest chose the older white male to be their adviser when asked to decide based only on a photo of eight people, four women and four men, according to a Spectrem Group survey.
About 40% of an even wealthier group, those with $5 million or more in investible assets, chose the older white male.
The middle-aged white man in the photo scored the second-highest percentage of fans. About a quarter of those surveyed picked him to be their adviser based solely on his appearance in the picture.
The young and middle-aged white women were the next most popular picks among wealthy individuals,the Spectrem Group survey found.
“Whether you look at the responses from males versus females, or among different age cuts, or even among various ethnicities, the older white male was the one the greatest percentage picked,” said Randy Wostratzky, a director at research firm Spectrem Group.
The report concluded that these groups “are perceived to have the most experience and to be the most trustworthy.”
Financial advisers said they've seen potential clients, especially older individuals, make these snap judgments about whether they would make a good planner. Therefore, many focus on what they can control in making a strong first impression.
“Your appearance and body language speak before you even say a word,” said Tish Gray, a wealth planning adviser with Sagemark Consulting, a division of Lincoln Financial Advisors. “In the first 30 seconds, someone has already made assumptions about who you are through their lens of perception.”
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Philip Olson, founder of The Art of Finance, said as a young adviser he's faced this kind of immediate bias his whole career from prospects who conclude he's not old enough to know enough to manage their money.
Mr. Olson has been an adviser for five years and says he has a “baby face.” The last couple of years he has even sported facial hair to help with that perception issue.
The worst offenders are those who are about 50 and older, Mr. Olson said.
“Baby boomers get hung up on my age and would clearly be more comfortable with someone who is a man with more gray hair,” he said.
However, he points out one advantage to not looking like a stereotypical financial adviser: “It's also associated with a lot of the sins of the industry, and I'm happy to distance myself from that.”
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Craig Pfeiffer, president and CEO of the Money Management Institute, said participants in the survey choose the older white male in the photo because of what that demographic represents. They are viewed as wise, caring and having access to resources, he said.
“Older white men don't do something that younger women can't, it's just that younger women apparently aren't doing it,” he said.
He suggested advisers mimic those who have been successful at showing prospects and clients that they sincerely care about them.
Rita Robbins, president of Affiliated Advisors, said people who are especially expressive often appeal to prospective clients.
Humans are naturally drawn to those who communicate in an open way, she said.
Animated people "tend to be liked more than difficult-to-read people," Ms. Robbins said. "This is because we are more confident in our assessment of them."
Also, advisers should try to find things in common with the prospect from the first meeting.
"The things we share create a powerful bond," she said.
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