There’s a lot of conventional wisdom about how men and women approach money differently. Women are more risk-averse than men. They take longer to make decisions and they’re less confident than male investors.
However, a recent survey by United Capital suggests that this perceived lack of confidence is malarkey.
“Where discrepancies between men and women’s financial lives have been identified, the financial industry has attributed them to women’s lack of confidence, their inability to plan long-term, and their traditional dependence on men,” according to the report.
Those assumptions have drawn a picture of female investors as low on confidence, short on money and defined by their gender. These assumptions are not only condescending and off-putting, they put all the blame on women and exonerate the financial industry of any responsibility. Worse, they’re simply not true.
United Capital surveyed 1,000 women for the report. In addition, 30 affluent women between age 35 and 55 were asked to keep a personal diary for a week and to provide real-time feedback on daily events through a customized mobile app. The women hit a button – elation or frustration – to describe an experience and recorded a short video about it.
The more than 1,400 videos collected were evenly divided between positive and negative experiences, and were analyzed for respondents’ relationship with money.
Over half of the financial experiences – both positive and negative — reported by the diary subgroup were the result of respondents’ high standards being met or broken. Not a single woman saw herself as having low confidence, according to the report.
“If advisors think [women] have a confidence gap, they’re probably going to end up talking down to them, which is the last thing women need or want,” Gail Graham, chief marketing officer for United Capital said.
The broader survey found 89% of women have high expectations for themselves and others, and 80% are frustrated when those expectations aren’t met. Furthermore, 90% say they sacrifice time, money and energy to make sure things are done correctly.
More affluent respondents were more likely to say they have high expectations of life and other people: 98% compared with 89% of the general population. Wealthier women were also less likely to say their financial experiences were specific to their gender. Ninety percent said their daily financial experiences were not gender related, compared to 76% of the general population.
“When it comes to financial confidence, women are not slower or less sure of themselves, they just want things done right. They are empowered individuals who manage their decisions according to the exceedingly high standards they set for themselves and others,” the report stated.
“The first thing advisors need to do is show respect for women, and ask women what they’re expecting from the advisor,” Graham said. “Be very clear that you understand how she’s evaluating you. I think some advisors would be surprised about that, that women have a clear set of expectations and it may not be just investment returns.”
United Capital found 77% of the women surveyed feel like they have to do everything themselves and little wonder, with the majority sacrificing time, money and energy to make sure things are done just so.
A third of the frustrations reported by the diary subgroup were about time, compared with just 8% that were about money.
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