Years of research show female investors outperform men. But only about 1 in 5 brokers are women.
When people picture a financial adviser, they typically think of a gray-haired guy who looks like Bernie Madoff, or perhaps a younger man like Leonardo DiCaprio’s character in “The Wolf of Wall Street.” The imagined portrait rarely resembles someone like me, a woman. And that underlying perception is fairly accurate.
Roughly less than 20 percent of financial advisers are women, a number that has barely budged for the past two decades despite rising gender equity in other fields. But what has this overwhelmingly male work force accomplished?
Banks and brokerage firms consistently rank rock bottom on lists of the most beloved companies and brands — and not by coincidence. A major basis of the distrust is rampant conflicts of interests. In 2015, the Department of Labor estimated that the cost of conflicted investment advice for retirement savers is more than $17 billion per year. Then there are the roots of the financial crisis last decade, several of which can be traced to advisers convincing clients that investing in high-risk subprime mortgages was a safe bet.
While neither sex is immune to shoddy behavior, research has shown that female investors are more likely than men to focus on a family’s financial goals over their own absolute investment performance. A study by the Warwick Business School concluded that women outperformed men at investing by 1.8 percent. For one, women avoid “lottery style” trading and are more likely to focus on shares with good track records or on overlooked yet productive funds.
www.nytimes.com
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