Building Deeper Financial Advisory Relationships with Women

Dimensional introduced its Women and Wealth community in 2015 in response to the growing interest in this subject from advisors across the globe.  We started by asking a simple question: are the financial planning needs of women different?  If so, can Dimensional contribute anything to the conversation?  Having asked the question, we listened and gathered a wealth of information.  Here are some of the key lessons we learned from the adviser community regarding the common financial challenges women face and what advisers can do to help them improve their investing experience.

Women have seen an increase in economic power

Women are earning and inheriting more wealth than ever before. They are not only outliving men but also living for longer and spending more time in retirement. When we look at the data across developed countries, we find that, on average, women spend about five years more than men in retirement1.  This means that additional funds are required to support them throughout that period.

Whilst there is a clear need to save more during their lifetimes, women can generally face some significant challenges that impact their ability to do so, not least of which are lower potential lifetime earnings relative to men2. Women tend to take more career breaks than men to care for children, ageing parents, or both simultaneously, giving rise to the so-called “sandwich generation.”  Despite some progress, there is also the gender pay gap to consider3.

Advisers have shared that their female clients often need more guidance regarding the retirement phase of their lives. For example, higher health care costs go hand-in-hand with increased longevity, as do higher rates of disability and chronic health problems. In addition, given that many women outlive their partners, they often cannot rely on care being provided within the family and need to factor in additional care costs in later life into their retirement planning.

Women have been disproportionally affected by the pandemic

When we examine the data on furloughed employees in the U.K., we can see that women have made up the majority of this population since the start of the pandemic, and the gap had widened in periods when schools were closed4.

We also saw that job and income security has been top of mind for women5. Recessions typically hit industries like construction and manufacturing, which have predominantly male workforces, but that’s not what we saw with COVID-19. Industries with higher levels of female employment, such as the travel and hospitality sectors, have been more deeply impacted by the pandemic.

We also looked at the data concerning dual working parent households and how they were operating6. For example, during the pandemic, it shows that women were far more likely to step back from paid work and more likely to take on household responsibilities. These additional responsibilities equate to about two hours a day and can impact how women think about their finances and long-term goals.

Women may have different risk appetites

As you would expect, advisers report that women have a broad spectrum of risk preferences and tolerances. However, they support the findings of previous behavioural finance studies that suggest women tend to keep higher balances of cash and fixed income compared to riskier asset classes such as equity.  This apparent preference for certainty in the short term means that investing for longer-term goals may be compromised by lower overall investment returns.  Additional studies have linked this risk appetite to investor confidence.

At Dimensional, we wanted to explore this question further and therefore, in our annual investor survey, we included a question that specifically asked about investor competence. We queried men and women about how confident they were in their investment knowledge, and about 60% of men described themselves as competent compared with about 40% of women. Interestingly, only 11% of men described themselves as not confident, but that was double for women.

This is undoubtedly an area where an empathetic adviser can really add value for women by understanding what risk means to them and then helping them identify an appropriate allocation to manage that risk.

Women are not a homogeneous group

Working with female clients is often misinterpreted as a niche area of advice. However, women are not a small, specialized group, they makeup over half of the global population and have a wide range of financial needs, goals, investment preferences and personal situations. They can be breadwinners, entrepreneurs, stay-at-home parents, widows, and divorcees. They can be any or all those things at some point in their lives and, because of this, an advisory relationship can be complex.

Advisers have told us that many of their new female clients come to them at a time of transition. Often, they are at a point in their life where they are making many important decisions and are experiencing a lot of change.  So, although their reasons for seeking financial advice will be unique to each individual, the need for a successful investing experience will be common to all.

Ultimately, for a woman planning for her future, an advisor can be a trusted partner in helping her navigate her financial life, both in the near and long term.

This is a small sample of the many financial concerns to consider when working with female clients.  But, as an adviser, you will understand more than most that everyone’s situation is different. You know your clients best, and if you know their specific needs and circumstances, it is within your power to tailor their client experience to be the best it can be.

As mentioned earlier, Dimensional has been building our global women and wealth community since 2015. Financial professionals interested in learning more can contact


1 OECD, Self Sufficiency Indicators

2 OECD, Gender Wage Gap

3 HEPI, “Mind the Gap: Gender differences in higher education” (2020)

4 Office of National Statistics, “Coronavirus (COIVD-19) and the different effects on men and women in the U.K., March 2020- February 2021.”

5 Dimensional’s Working with Professional Women Pre Event Survey; Oct 27 & Nov 3

6 ONS, Parenting in lockdown: Coronavirus and the effects on work-life balance