Wealth advisers who rely on the common belief that female clients are “less tolerant and confident” are reckless, a new report has warned.
A study by behavioural analysis specialist Oxford Risk concluded: “Subtle beliefs grounded in part on ‘average’ assumptions, such as that female clients are going to be less confident and more risk-averse, can be harmless most of the time.
“But sometimes they lead to unsuitable advice. And more to the point, they’re always unnecessary.”
The researcher today put out a new behaviour profiling study showing that differences between men's and women’s investment habits may be more marginal and perhaps even more subtle.
In a study of nearly 2,000 investors, among the smallest 14% portion of the population exhibiting high investment confidence, the split between male and female investors was 55% to 45%.
This group of people showed a high preference for environmental, social and governance investing.
The study was conducted in the UK, Hong Kong, Taiwan and Singapore, where women who took part in the study scored an average of 3.04 on a five-point scale for investor confidence compared to men who on average scored 3.51.
Crucial considerations for such studies include the capital allocation available to each group, and Oxford Risk said: “Women’s lower confidence is a factor in more women than men not investing and having much higher cash balances, which in turn means they miss out on potential returns.”