Women and Wealth: Building Better Advice Relationships

The Gender Investment Gap and the Gender Pension Gap in the UK are well documented. Boring Money has sized the Gender Investment Gap at £678 billion, roughly the same size as the GDP of Poland!

The problem is not limited to lower balances and less engagement and should not be overlooked by the industry. Especially as data from the National Retirement Forecast shows that only 24% of women and 36% of men are on track for a comfortable lifestyle in retirement. Scottish Widows research also shows that there remains a significant gender gap in projected retirement outcomes – a 32% gap in overall projected retirement income.

Our research shows that the industry can do better in how we engage, inform and support women who seek and receive financial advice.

As we consider how the advice profession can improve its services, it’s important to understand the key reasons why women typically seek advice, what outcomes they are looking for and what issues they report.

First, life events are a key trigger for women to seek financial advice and these are more likely to be the catalyst for women than men.

11% of advised women are prompted to seek advice by one-off life events, e.g. divorce, being widowed or redundancy, vs 8% of advised men.

Data shows that women are also more likely to report sitting back and letting their partner take the lead in any advice relationship which can lead to feelings of disenfranchisement, low satisfaction and also mean that questions or concerns go unanswered.

On average, 21% of advised women who are married/cohabiting say that despite receiving financial advice as a couple, their partner takes the lead on financial management and decisions compared to just 13% of male advice clients.

This is particularly driven by advised clients who are 65+, where 23% of advised women who are married/ cohabiting and are aged 65+ say their partner takes a lead vs just 10% of male advice clients within the same age cohort.

Women consistently report lower confidence in financial decision-making compared to men, particularly regarding investment products and pensions.

45% of women (advised and self-directed) don’t feel confident managing their pension for retirement*

Even among advised clients, confidence levels remain lower for women, leaving them more vulnerable to poor decision making. We see a spike in the number of advised women over the age of 65 who report needing extra help and would meet the FCA’s definition of vulnerability

Vulnerability and low investment confidence tend to reduce with age… however, for advised women over 65, we see these characteristics actually increase vs the 55-64 age group.

20% of advised women over 65 are vulnerable vs 12% of advised women aged 55-64 and vs 9% of male advice clients over 65.

This vulnerability is driven by low investment confidence among older advised women – 46% score their confidence choosing an investment product on their own at 0 to 5 out of 10 – making them extremely reliant on their adviser.

Understanding the factors behind these differences is essential for advisers aiming to tailor their services – particularly to meet the distinct needs of advised women – with the goal of supporting stronger customer outcomes and fostering lasting relationships

Women who are dissatisfied or cite lower levels of satisfaction with their adviser will often report different concerns from men.

For example, 30% of dissatisfied advised women say “my adviser was not as knowledgeable as expected” vs 15% of dissatisfied male clients.

By speaking with dissatisfied advised women first hand, we have learnt that those asked are not unhappy with their adviser’s professional knowledge or qualifications. They are, however, unhappy with their adviser’s ability to think proactively about the bigger picture, taking into consideration an individual’s needs and helping them achieve their broader goals.

This paper has been produced to help advisers to understand the problems, to hear from women clients in their own words, and to share some tips from leading experts to help address some of the underlying problems.

Read the full whitepaper and watch our vodcast hosted by Susan Hope, Business Development Director, Scottish Widows, featuring Holly Mackay (Founder and MD, Boring Money), Dr Ylva Baekström (Senior Lecturer, Finance, King’s Business School) and Sam Secomb FPFS (Chartered Financial Planner, Director at Pentins and Women’s Wealth) where they share actionable tips financial advisers can implement into their practice.