Birds of a feather flock together, and it seems the saying also rings true for small business owners looking for a financial advisor. According to a new study released yesterday by The American College, small business owners prefer to speak to financial advisors of the same sex, with men exhibiting a stronger gender bias than their female counterparts.
Approximately 61% of women who are small business owners prefer to speak to a financial advisor who is a woman, yet only 24% of men prefer to speak to female financial advisors. According to 2010 data from the Bureau of Labor Statistics, only 30.8% of women were personal financial advisors.
Conversely, 75% of men prefer to speak to male financial advisors while only 40% of women exhibit the same preference.
This disconnect between the preference for female financial advisors by women business owners and the gender composition of the financial advising community becomes all the more alarming when looking at the broader American economy.
According to the Center for Women’s Business Research, 10.1 million businesses report women owning 50% or more of the enterprise. In addition, one in five businesses that earn over $1 million in revenue are owned by women. Women-owned businesses employ more than 13 million people and are estimated to generate over $1.9 trillion in sales.
“The financial services industry needs to do a better job of recruiting, training and retaining women as financial advisors if it is going to successfully meet the demand of women small business owners,” says Mary Quist-Newins, director of the State Farm Center for Women and Financial Services at The American College. “Failing to diversify could lead to significant missed economic opportunities for financial services companies and reduced levels of financial security for women small business owners.”
In other study results:
- Women (84%) are more concerned about retirement planning than men (76%) and report having taken more action to address this issue.
- More women (41%) have consulted with an advisor about starting a retirement plan (vs. 29% of men).
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