Financial advice can provide health and well-being benefits with a gender based approach proving to be better, particularly for women, according to new whitepaper released by the Beddoes Institute.
The paper – Money, wellbeing and the role of financial advice: A gender-based approach, released by the Association of Financial Advisers (AFA) and supported by TAL, found that a person’s financial management ability increases over the course of an advice relationship.
This increase was at 27% for women and 24% for men with low financial literacy while those who considered themselves poor or very poor in managing their finances at the start of the advice relationship showed a 44% improvement in financial understanding.
Beddoes Institute, Director, Dr Rebecca Sheils said the research was a turning point for the advice profession and was the largest piece of research of its type with more than 7800 unadvised people surveyed, overlaid with a further 400 surveyed people.
“It provides new direction for how financial advisers work with their male and female clients to drive deeper engagement and advocacy of financial advice as well as providing clear and compelling evidence about the improved health and wellness from financial advice that can be used to encourage more consumers to enter an advice relationship,” Shiels said.
The whitepaper also found that while men and women approached advice differently, those of a different generation also had separate needs with women more cautious in engaging an adviser than men. Despite this common advice triggers for Gen Y clients were starting a family while Gen X and Baby Boomer women were more driven to advice by the death of a loved one while Gen X men were driven to advice by divorce and Baby Boomer men were driven by redundancy.
AFA, Chief Executive, Brad Fox said the age of a ‘one size fits all’ approach to financial advice had passed and the inter-relatedness between finances and health and well-being and the positive impact of financial advice highlighted the important role that financial advisers played in improving the lives of their clients.
“The present and the future of great financial advice lies in tailoring advice, advice relationships and the adviser’s style specifically to individual client’s preferences which can be indicated by age, life-stage and gender,” Fox said.
“What we know from this study is that thinking about money can have a significantly greater negative influence on a woman’s overall health and well-being than that of a man’s,” Fox added.
“This study is really powerful for the financial advice profession because it shows that female clients offer significant growth potential for practices. The research has found women’s financial management ability tends to improve more from an advice relationship than men which means they are likely to have greater satisfaction and stay with their advisers longer.”
