Women Investors Demand More Than Men of Their Financial Advisors

Women demand more from their financial advisors than do men, according to a new study released this week by Hearts and Wallets, a retirement and savings trend research firm. Not only are they more demanding, but they are also more selective about which firms and advisors they choose and the reasons for their preferences.

Women are now the sole head of 32 percent of U.S. households, an increase of 18 percent in the past five years. They control at least $16.2 trillion of household assets. The survey found that women demand more from their financial services firms than men in every category measured. For example, 51 percent of women rate "explains things in understandable terms" as "extremely important," compared to 38 percent of men. Fifty percent insist on clearly and understandably presented fees" vs. 41 percent of men. Forty-seven percent demand their interests be put first, compared to 40 percent of men.

Traits that might seem to be a hindrance to successful investing have served women well. They are generally more risk-averse than men. They are also less confident in their investment knowledge and acumen. The Hearts and Wallets study found that 35 percent of women versus 26 percent of men more feel moderate to high anxiety about their financial future. Further, 41 percent say they are inexperienced with investing compared with 27 percent of men. To compensate, they will turn to their advisor, conduct their own research, and adjust their spending and saving habits.

Monthly investor surveys conducted by Millionaire Corner find more of a reliance by women than men on their financial advisor. For example, in a survey conducted in January, 54 percent of women vs 42 percent of men said that they rely on their advisor to do the research on the mutual funds in which they invest. Last August, amidst the market swings following the downgrade of the U.S. credit rating, women were more were more likely than men to call their advisor to ask questions and seek guidance. They were also more likely to receive pro-active phone calls from their advisors.

On the home front, stock market volatility has compelled women to become more throughtful and frugal shoppers than men. In a survey we conducted in November, 71 percent of women said they were being more selective in their shopping and more aggressively looking for deals compared with 63 percent of men. They were also more likely to have cut back on luxury items such as clothing and technology.

What do women most prize in a financial advisor? According to the Hearts and Minds survey, they do not want to feel pressured to buy investment products. They also seek transparency about fees and compensation and responsiveness.