Advisers are largely failing at meeting their female clients' most pressing desire: to clearly understand the implications of being fee-based versus commission-based, according to a researcher.
According to a survey performed by Hearts & Wallets LLC, 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, a research group that looks at retirement market trends in the financial services industry.
Last summer, the firm surveyed 2,300 women online on a variety of finance-related topics. When asked how well they understand how their primary financial services firm earns money, only 15% of the woman said “very well.” Another 44% said they understand “well,” and 40% said either “not well” or “not well at all.”
Married women fared far better than singles, with 19% of those married saying they understand 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 things in understandable terms, explain their fees clearly and offer low fees, with around half of the women saying those attributes are of the highest importance to them. Women ranked these attributes at least 10% higher than the men who were surveyed.
Only 12% of the women surveyed said they seek professional advice for retirement planning, although 56% said they find it difficult or very difficult to plan.