However, women are 18 per cent more willing to switch advisers: 40 per cent say they would change their bank or adviser in the event of a relationship break-up, compared with 29 per cent of men. In fact, 70 per cent of widowed women investors change advisers within one year of their partner's death.
Portfolio allocation is also very different: women’s average portfolios are 32 percent equities and 32 percent fixed-income investments, compared with 45 and 24 percent, respectively, for men.
McKinsey estimates that this creates a gap of €5,000-€10,000 (£4,440-£8,880) between men and women’s annual returns.
But it is important to remember that a lot of these differences in investing approach may be due to the income bracket a person places in, rather than their gender. Because of the constraints placed on most women’s earning power, they often place in lower income brackets, where both male and female investing behaviour differs to those with higher salaries.
What do financial advisers need to do?
They need to refocus on having investment and risk conversations with female clients that take into account their particular sets of priorities and proclivities, though without resorting to stereotypes.
And to help close the gap in annual returns, wealth managers should tailor advice to give women more opportunities to weigh up the risks and returns of different investment strategies.
But women are not a homogenous group, and different categories of people have different experiences, needing varying amounts, and types, of investment advice. After all, “all inequality is not created equal,” as the famous critical race theorist Kimberlé Crenshaw says.
ellesheva.kissin@ft.com
This report featured on the FTAdviser podcast, How to close the gender wealth gap.
