New research proves the significant health and well-being benefits of a gender-based approach to financial advice, particularly for women whose financial management ability increases by 27% over the course of an advice relationship and for people, both men and women, with low financial literacy.
This is the principal finding of ‘Money, wellbeing and the role of financial advice: A gender-based approach’, a white paper released today by the Association of Financial Advisers (AFA) with the support of TAL, based on research conducted by the Beddoes Institute.
“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,” said AFA CEO Brad Fox.
“This paper is a turning point for the profession,” says Dr Rebecca Sheils from the Beddoes Institute, “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.”
This inter-relatedness between finances and health and well-being, especially for people with low financial literacy and women in particular, and the positive impact that financial advisers have on their clients’ ability to manage their money highlights the important role that financial advisers play in improving the lives of their clients and contributing to the health and well-being of the Australian community.
But, with only two out of every ten Australians currently receiving financial advice, there is significant potential community benefit if more Australians were to seek financial advice.
“The age of a ‘one size fits all’ approach to financial advice has clearly passed,” says Fox. “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.”
This starts in the initial engagement phase with a potential new client, where practitioners can increase acceptance of financial advice strategies by both men and women by concentrating on what is important to each gender during these first meetings (e.g. relationship attributes for women and credibility/delivery attributes for men).
Segmentation of clients and targeting new markets using these findings will increase the success of practices’ growth strategies helping more Australians to receive financial advice and increasing the confidence, health and well-being of the community.
“This study is really powerful for the financial advice profession because it shows that female clients offer significant growth potential for practices,” says Fox.
“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.”
