As an expert in women and wealth, I have grown tired of hearing how men are financial savvy and women are not. While some research supports the notion that some female clients are less confident when making financial decisions than their male counterparts, it cannot be inferred from the data that this makes men wiser. According to the 2014 report
Harnessing the Power of the Purse, women in the United States are as financially literate as men.
What happens to male clients when advisers assume based on their gender that they are knowledgeable and skilled in money management and investing? They get overlooked. That is ironic, as I usually use that word to describe how the industry treats female clients. However, men have their own challenges when it comes to money, and it is time to pay attention to them, too.
Here are a few things to consider when working with men:
'AS IF'
1. Men are socialized to act “as if.” They ask fewer questions in advisory meetings and often give the appearance of being knowledgeable. For some, it is a way to hide their vulnerability and not look weak. How do you know which male clients comprehend your recommendations versus placate you by acting “as if?” You don't unless you ask. With a male client, it may take a few more questions to get him to open up. But understanding what he really knows as opposed to what he is pretending to know is an important part of your job.
2. Overconfidence is just as problematic as a lack of confidence. The classic behavioral research study, Boys Will Be Boys: Gender, Overconfidence and Common Stock Investment, by Brad M. Barber and Terrance Odean, found that more men than women demonstrate overconfidence in investing. This contributes to men chasing hot stock tips, attempting to beat the market and ultimately having lower long-term returns than female investors. As an adviser, a cocky client can be a source of frustration. But it also highlights how these male clients really need a trusted and objective adviser in their corner, similarly to a less than confident female investor. It is the other side of the coin and comes down to the fact that human beings make bad money decisions when emotions call the shots.
FINANCIAL LITERACY NOT DETERMINED BY GENDER
3. Men need financial education, too. Financial literacy is not determined by a client's sex. Knowledgeable clients often had parents who taught them about personal finance and investing or had an interest that led them to learn more about money on their own or through formal education. To assume that women are not good with numbers as men is a trap that can be easily avoided. Ask questions such as:
• On a scale of one to five, five being the highest, how would you rate your financial knowledge, skills and insight?
• What would it take to increase that number one basis point?
• How can I help you do that in my role as your adviser?
Expect women to rate themselves too low and men to rate themselves too high. Then work with each client to develop a personalized strategy for improving literacy and decision-making skills.
The key to being a good client-centric adviser is to understand key gender differences, avoid overly stereotyping your clients based on this research and work diligently to understand all your clients as unique individuals. And whatever you do, don't forget the men!
Kathleen Burns Kingsbury is a wealth psychology expert, founder of KBK Wealth Connection, and author of several books including How to Give Financial Advice to Couples.
