The number of affluent investors open to paying for financial advice grew significantly for both male and female investors from 2020 to 2023, according to research firm Cerulli’s latest Cerulli Edge—U.S. Retail Investor Edition report which polled households with more than $250,000 in investable assets and households with annual income over $125,000 led by a person under age 45.
During that period, interest in paid financial advice increased from 58% to 63% among men and from 52% to 61% among women, Cerulli said.
“Investors are increasingly becoming aware of the complexity of the decisions they face about charting their financial futures, and many realize that having a trusted advisor can help them both better pursue their long-term goals and worry less along the way,” according to a press release.
Different Preferences Between Men And Women
But advice providers must account for different preferences of men and women, the firm warned.
“There are key differences in marketing to clients of different ages and investable assets, and appealing to both men and women sometimes also requires different acquisition strategies,” according to John McKenna, a Research Analyst at Cerulli.
“There are key differences in marketing to clients of different ages and investable assets, and appealing to both men and women sometimes also requires different acquisition strategies.”
– John McKenna, Research Analyst, Cerulli
“As women take on more financial decision making, either independently or on behalf of their families, having a multi-faceted approach to client acquisition can be a major advantage in both attracting new customers and keeping clients’ families in the fold,” McKenna said.
He continued, “Overall, as the financial wealth of women increases, advisors and providers must understand best practices for acquiring women clients and focus on the aspects of service that women want from their financial providers.”
McKenna added, “With targeted marketing efforts highlighting the value of advice specific to each segment, advice providers across the wealth management landscape have substantial client acquisition opportunities.”
Based on Cerulli’s initial review of the survey’s findings, the “most notable difference between genders … is that 50% of affluent women investors fall into the Advisor-Reliant segment, compared to just 34% of men,” according to the report, referring to investors who are heavily dependent on advisors.
The report explains: “This significant difference likely results from a complex combination of societal expectations and norms that create individual preferences over time. Regardless of the exact cause, data illustrates that women investors are more inclined to show concern and awareness of their financial position and are more likely to seek out a professional advisor on an ongoing basis.”
Advisor reliance is increasing among male investors, the report added.
How Investors Are Selecting Advisors
Working individuals typically start investing with their firms’ retirement plans, according to Cerulli. Compared to men at 11%, women are more likely to say their financial advisors came with their employer’s retirement plan, at 14%. Women were also more likely to select their advisors based on family referral of a choice of a spouse or parent, at 23%, compared with 20% of men.
When selecting a financial institution, both men and women prefer full-service brokerage firms, but for other channels, “nuances start to emerge,” according to Cerulli. For example, the survey found that 28% of women preferred banks, compared to 24% of men.
Jeff Berman, Contributing Editor and Reporter at Wealth Solutions Report, can be reached at jberman@wealthsolutionsreport.com.
