Demand for Advice Strong Across Demographic Groups

New research from Cerulli Associates urges financial advisers to look past gender when making assumptions about market demand and opportunity—finding “fewer than one-third of women believe they ‘need very little advice’ when investing, compared with nearly half (49%) of male respondents.”

“There is a popular belief that men tend to be more involved in the investment process than women,” says Shaun Quirk, senior analyst at Cerulli. “According to our data, almost 60% of male investors surveyed indicate a desire to be actively involved in the day-to-day management of their portfolio, versus 42% of women.”

While women report less of an interest in contributing to daily trading decisions or portfolio structuring, the Cerulli research argues this does not mean they are less engaged investors overall or that they demand less from advisers and investment providers. “Some industry professionals suggest that women are more likely to implement long-term, goal-oriented investment strategies that do not require day-to-day trading,” Quirk says. “With this in mind, providers can position planning tools and holistic wealth management solutions that align with their female clients’ views on portfolio management.”

According to Cerulli, there is still relatively little differentiation across firm products and platforms to target female investors, suggesting firms that move first could have an advantage. Cerulli believes that financial services providers can objectively analyze the differences between the two cohorts—i.e., men and women—for perspective on how to communicate and market products to these two distinct segments in relation to investing and planning for retirement.

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Cerulli data shows only 30% of women surveyed identify themselves as self-directed investors, compared with 41% of men. At the same time, more than 50% of female investors conduct their own research before engaging with an investment professional, compared with nearly two-thirds (63%) of males.

“It is worth noting that women’s desire to be actively involved increases once the investor accumulates more than $1 million in investable assets, indicating a possible engagement opportunity,” the research suggests. “Providers that offer workshops and webinars designed specifically for women at a time when the female investor wants to be more involved may be able to strengthen current and prospective relationships.”

The Cerulli research shows “one-quarter of the adviser-directed female investors have between $100,000 and $250,000 in investable assets, highlighting the importance of reaching out to these women early on in the accumulation phase of their lives.” As time goes by, Cerulli explains, the “desire for adviser contact remains and strengthens as certain women accumulate wealth; almost one-third of female investors with between $500,000 and $1 million in investable assets report an adviser relationship.”

This findings and other topics are explored in greater depth in Cerulli’s third quarter 2016 issue of The Cerulli Edge – U.S. Retail Investor Edition.