Women want answers

Advisers are largely failing to answer their female clients’ most pressing question: What’s the difference between being fee-based and commission-based?

According to a survey performed by Hearts & Wallets LLC, a research group that looks at retirement market trends in the financial services industry, an overwhelming majority of single and married women across all age and income groups do not completely understand how their financial services provider earns money.

“Of all the variables that affect and explain trust, making sure their clients understand how they earn their money is bigger than anything else advisers can do,” said Laura Varas, a principal at Hearts & Wallets.

Last summer, the firm surveyed 2,300 women online on a variety of finance-related topics. When asked how well they understood how their primary financial services firm earned money, only 15% of the woman said “very well.” Another 44% said they understood “well,” and 40% said “not well” or “not well at all.”

Married women fared far better than singles, with 19% saying they understood the process very well, while only 11% of single women saying the same.

The survey suggested that the three most important attributes of an investment firm or representative are that they explain financial topics in understandable terms, explain their fees clearly and offer low fees. About half of the women said those attributes are of the highest importance to them; women ranked these attributes at least 10% higher than men in a similar survey.

Only 12% of the women surveyed said they sought professional advice for retirement planning, although 56% said they found it difficult or very difficult to plan.