Why FAs Must Systematically Overcome Gender Bias
Financial advisors unable to overcome their built-in gender bias risk missing out on a significant portion of U.S. wealth controlled by women, according to Adrienne Penta, a senior vice president at Brown Brothers Harriman.
Women already make up 40% of primary household breadwinners, a fourfold increase since 1960, according to Bank of Montreal data cited by Penta in an article penned for World Finance. Yet 86% of U.S. advisors are male, according to Cerulli data cited. And advisors who think they’re gender-savvy and can relate appropriately to female clients without any conscious effort may want to look at a test developed by Harvard University.
The implicit association test, which examines the strength of associations between concepts and stereotypes, found that 75% of those who take it correlate women with family — and men with work, according to Penta.
Meanwhile, letting gender bias get in the way can certainly hurt an advisor’s book of business. While 44% of men say they’re willing to change their wealth manager, that figure rises to 62% for women, according to an EY report cited by Penta. Overcoming the bias, on the other hand, can lead to concrete improvements in an advisor’s relationships with female clients. Wealth managers with “gender smarts” are 27% more likely to find the right balance between life goals and investment for their female clients and therefore to deliver tailored advice, according to a Centre for Talent Innovation report cited by Penta. The same report, however, found that advisors have a long way to go: 67% of U.S. women feel that their advisor doesn’t get them or isn’t interested, Penta writes.
Dealing with unconscious biases will require a conscious approach, according to Penta. The implicit association test could be a good start for financial advice firms, according to the publication. But practices should also invest in training, take client feedback and write best practices aimed at improving relationships and communications to tackle unconscious biases, Penta writes.