Small Business Owners Show Strong Bias for Financial Advisors of Same Gender
-Financial industry composition "out of sync" with future demands of small business owners-
BRYN MAWR, Pa., Jan. 9, 2012 /PRNewswire-USNewswire/ -- According to a new study released today 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 percent of women who are small business owners prefer to speak to a financial advisor who is a woman, yet only 24 percent of men prefer to speak to female financial advisors. According to 2010 data from the Bureau of Labor Statistics, only 30.8 percent of women were personal financial advisors.
Conversely, 75 percent of men prefer to speak to male financial advisors while only 40 percent 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 percent 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," said Mary Quist-Newins, ChFC®, CLU®, CFP®, Director of the State Farm Center for Women and Financial Services at The American College, the academic entity that conducted the study. "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 (W) are more concerned about retirement planning than men (M) (84%W vs. 76%M) and report having taken more action to address this issue.
- More women have consulted with a financial advisor about maximizing business owner benefits (44%W vs. 33%M).
- More women have consulted with an advisor about starting a retirement plan (41%W vs. 29%M).
- More women than men list not having enough money in retirement as one of their top three concerns.
- Women and men state that they take an active role in understanding needs in retirement planning (75%W vs. 85%M), however:
- Many have not estimated how much capital they will need to be able to retire (34%W vs. 26%M).
- Only a few have a formal, written financial plan for managing income and expenses in retirement (24%W vs. 34%M) or have a formal, written plan for transitioning their business at retirement (11%W vs. 28%M).
- Most small business owners have not consulted with an advisor about retirement planning (44%W vs. 33%M) but those who have report being satisfied with their advisor relationship (76%W vs. 85%M).
Methodology: "Business Owners" were defined as individuals who own 50 percent or more of the business and who make or share in financial and other business decisions. All the businesses contacted in this survey have been in operation for three or more years and have annual business revenue of $50,000/year or more. 1,255 interviews were conducted (835 women and 420 men). Margin of error is + or – 3.3 percent for females and 4.7 percent for males.
The American College is the nation's largest non-profit educational institution devoted to financial services. Holding the highest level of academic accreditation, The College has served as a valued business partner to banks, brokerage firms, insurance companies and others for over 85 years. The American College's faculty represents some of the financial services industry's foremost thought leaders, including the State Farm Center for Women and Financial Services – the first and only academic institution devoted exclusively to the study of women and financial services. For more information, visit TheAmericanCollege.edu
 Bureau of Labor Statistics, Current Population Survey, "Table 11: Employed persons by detailed occupation, sex, race, and Hispanic or Latino ethnicity," Annual Averages 2010 (2011).
 Center for Women's Business Research. 2008-2009 http://www.womensbusinessresearchcenter.org/research/keyfacts
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SOURCE The American College