While normally the aim is to treat everyone equally and to be conscious and inclusive with those of us who don't fit into sex and gender norms, there are some scenarios where observing the broad differences in our typical gender-based perceptions can be healthy. Finances are one area where women typically have a worse experience compared to men, for a variety of very much gender-based reasons. Tackling these issues, therefore, can get a boost by taking a gender-based approach.
The Beddoes Institute, TAL and the Association of Financial Advisers (AFA) have produced a white paper discussing financial advice and its impact on consumer wellbeing and health. According to the research, there is a significant positive contribution to our overall health and wellbeing by our financial advisers, who offer us financial literacy, a sense of security, and guidance when we need it.
The white paper, Money, Well-being and the Role of Financial Advice – a gender-based approach, starts off with the link between 'unadvised' consumers, and what happens when we think about money, and how this impacts our health and wellbeing.
That is, when you are quietly freaking out about money, it stresses you out and everything feels bad.
Then, the report moves on to the differences between the needs and expectations of men and women in an advice relationship, offering advisers some ideas about how to capitalise on these elements in their client relationships.
The research data came from two sources at the Beddoes - the 2015 Getting Sorted study on unadvised consumers, which is the largest consumer-focused financial literacy study conducted across Australia to date, and the first that linked financial literacy with health and wellbeing, despite each of us acutely understanding the link. The 2015 Client Experience survey provided the advised client sample.
When money goes bad
Health outcomes for upon thinking about money can have negative health impacts for everyone, but in particular those with low financial literacy and women. When women with low financial literacy think about money, they more often feel sad, stressed, and anxious, which can lead to poor eating habits, more booze, and less exercise - this ends up with a lower life-satisfaction rating.
Higher levels of financial literacy result in improved emotional and physical health, and better relationships. Key point here? Increasing the financial literacy of clients should be a goal of financial advisers, who are well-placed to do so.
Suggestions have been made in the paper that if everyone was a bit more moneysmart, we'd have better health and happiness, and could ultimately reduce spending on welfare and Medicare.
The impact of advice in different life stages - key findings
- Gen Y women's financial management skills improved more than men in the same age group over the course of an advice relationship - women improved 35 per cent, while men only improved 19 per cent.
- Gen X women benefit more from advice than any other age group
- Baby Boomer women benefit least (but there is still a significant benefit)
- The ones who knew the least improved the most
- A formal education has little bearing on financial literacy and money management skills, since it is a skill taught to us by our parents, not something we learn at school or university
Why we should be tailoring advice by gender
There are subtle differences, the report states, between the needs and expectations of men and women in an advisory relationship. Our age also matters.
The primary trigger for obtaining financial advice and hiring an adviser is retirement, but also starting a family, the death of a loved one, divorce, redundancy and budgeting advice are also reasons.
A trusted referral matters - 40 per cent of new advice clients in the past two years had someone they trusted refer them to their adviser, and when consumers don't have this, they are reluctant to seek an adviser out.
Women put more impetus on a trusted referral, possibly being more cautious than men, while men are more likely to use other methods that do not include a trusted referral.
Men and women value different things in the relationship, with women valuing the relationship - listening, understanding, being trustworthy and communicating well. Men are more focused on credentials and professionalism.
The report has some useful advice for advisers wanting to ensure they give their clients what they want.