DOES GENDER MATTER WHEN CHOOSING A WEALTH MANAGER?
BY JESSICA CRANE, EXECUTIVE DIRECTOR
When I have put this question to peers, the first reaction tends to be surprise, that they haven’t really considered it before. Their second reaction tends to be no, gender shouldn’t matter because if you are receiving good sound advice, from an individual that you trust and respect, why should it even come into the equation?
Interestingly, when the question is put to clients, the answer is rather different. Although they agree that gender shouldn’t matter from a quantitative point of view, from the relationship side, clients often have a preference.
The single biggest factor that affects whether you can reach your investment objectives is ensuring that you have provided for all eventualities that are likely to affect your investment outcome. This begs the question: should you consider gender when choosing your wealth manager?
In my experience, women who are appointing a wealth manager for the first time – perhaps after a divorce or a bereavement – will often specify that they are looking for a female wealth manager. Gender can be one of the first and most important differentiators when they are deciding who to go with. This was reinforced recently by a survey carried out by Boston Multi Family Office which showed that whilst 70% of wealth holders saw gender as a primary segmentation factor, only 17% of advisors did.1
A PLAN BUILT AROUND YOUR NEEDS
It is crucial that you completely trust your adviser, and that they fully understand what drives and concerns you. Considering your wealth manager’s role in your life, and the importance of wealth planning being attuned to your unique needs, it is important that you choose someone who can most appropriately guide you through your unique circumstances.
We would argue that this is even more important in the case of women, as the factors that affect their investment plans are more likely to change over the course of their life, requiring a more adaptable approach.
The same survey on the state of the female wealth conducted by the Boston Multi Family Office2, approximately 63% of respondents – who included wealth holders, entrepreneurs and family office professionals – believed that women’s financial planning requirements are particularly neglected, and that the industry is not doing a good job of serving women’s needs.
Without wanting to resort to gender stereotypes, on the whole women face different challenges than men – across such areas as pay differential (gender pay gap), maternity leave and care responsibilities leading to flexible working requirements and longer life expectancies. Working with an advisor who recognises these challenges and who has perhaps experienced them also, could be useful or at least prove bonding for you both.
In our experience, the biggest variable for women is their ability to continue on their earnings trajectory amid major life events. The birth of children, a global pandemic3, the illness of family members, and divorce tend to affect women’s career trajectory more than men.
WHAT SORT OF PROFESSIONAL RELATIONSHIP ARE YOU LOOKING FOR?
While we would not recommend that you look at your professional relationships in the same way you might choose a friend, it might be worth considering what sort of professional relationship you are looking for. In the Channel Islands, the ideal trusted adviser has historically been described as someone who behaves “en bon pere de famille” – as a good father. Although this sort of relationship certainly has its merits, it doesn’t necessarily feel appropriate in the modern world and it certainly won’t reflect the relationship that many people seek from their wealth manager. I think the concept of collaboration is important and a more modern interpretation of the ideal trusted advisor should be more akin to a sensible friend, or a wise sibling.
As well as whether the wealth manager “gets” you and understands your goals and priorities, do you actually like them and respect their professional opinions and their values? These things are impossible to quantify but from a human nature perspective, makes the relationships so much more fulfilling. As with any business relationship, the closer you’re aligned personally, the more successful the partnership is likely to be.
MORE RESPONSIBILITIES AND MORE CHOICE
Needless to say, these factors and how you choose to deal with them, have significant ramifications for your wealth plan. Everyone is likely to face these choices in their lives, but no two people will have the same motivations about what drives their concerns and objectives. Similarly, no two people will have an equal ability to absorb any limitations on their income trajectory and may need to make difficult decisions to ensure they still reach their goals.
It is here where the power of a professional adviser who understands your life experiences, concerns and motivations cannot be underestimated. It can be invaluable to have an independent ear who can guide you towards a sufficiently flexible plan focused on your needs, while helping you take control of your financial planning.
Ultimately it’s up to you whether gender is a factor in who you choose as your wealth manager. Whilst gender is certainly not the only determinant in your choice, it could be a useful segmentation factor to help determine what your relationship with your wealth manager should look like. The most important factor is the trust between client and advisor and cultivating that relationship to ensure your financial goals are met.
If you’re interested in having a conversation with an advisor at London & Capital, get in touch using the contact form here.