State Street Global Advisors says women approach money differently than men at a time when they are taking over the economic decisions of many households, the investment management firm based in Boston, says in a new report.
"Closing the Gender Gap of Advice," a report released Monday, says women approach money and investments differently from their male peers and advisors must be cognizant of that difference.
Women are generally more risk averse and plan for a longer-time frame than men, says the report.
Another difference that should be noted by advisors is that women want more information before making a decision and if they do not have it they will second-guess themselves. Advisors should help educate their women clients about products and financial concepts, says State Street.
Women relate investments to such things as security and independence, not to making money just for the sake of making it. Advisors need to take into consideration the emotional side of a woman’s financial decisions, as well as the information side, according to the report.
Women are growing their financial impact and now control $11 trillion in investable assets. They also are the primary or sole income earner in 40 percent of households with children, State Street says. Women now earn more than half of the college degrees issued each year.
Advisors should work in partnership with their women clients.
“Help her approach decision-making in a way that makes her feel most empowered. Be a collaborator, not a commander,” says Closing the Gender Gap of Advice. “This will reinforce confidence and lead to higher satisfaction. Look for opportunities to increase confidence by building on strengths and acknowledging previous successes.”