More women than men say they are solely responsible for making financial decisions for their households—but these decisionmakers express lower levels of financial confidence and optimism than men, according to a new study from Regions Private Wealth Management.
Forty-four percent of women report being the financial decisionmaker for their household, compared with 35% of men. However, men rated their overall confidence in handling finances higher (6.20 on a seven-point confidence scale) than women (5.86). Women under age 50 rated their confidence even lower (5.61). The largest confidence gap between women and men is in the area of investing, in which women respondents showed a confidence level of 4.75 versus 5.42 for men.
“When people talk about the wealth gap, they are typically referring to the disparity in salary and retirement savings between men and women,” says Anne Copeland, head of Private Wealth Management for Regions Bank. “Our study shows there is also a confidence gap between men and women when it comes to financial matters. As women continue to advance personally and professionally, women’s financial opportunities and responsibilities are actually outpacing their financial confidence and optimism.”
Differences in the ways women and men gain confidence to make significant financial decisions, and where they seek financial advice and guidance, were also revealed. When asked to identify one or more resources and tools that helped them gain confidence in making their last major financial decision, 56% of women identified a financial adviser, and an equal number of men (56%) cited prior education.NEXT: One gender is likelier to turn to mom and dad for advice.
Notably, 48% of women under age 50 identified their parents as a resource, compared with only 30% of men under 50 who said the same. Women also more frequently identified financial advisers and spouses as resources for making financial decisions. In contrast, men cited financial books, magazines and websites at higher rates than women. “Women are hungry for financial advice and guidance, and are ‘crowd-sourcing’ this information from a wide variety of trusted resources,” Copeland says.
Regardless of gender, respondents clearly indicate the financial advice they would give their younger self would be to start younger and to save more (69%). Women were more likely than men to say they would “seek more advice from professionals” (38% vs. 30%).
Just under two-thirds of respondents rate their confidence in their future financial well-being as a 6 or 7 on a 7-point scale, where 7 is “Very confident.” The mean rating is 5.75. Females (5.62) are slightly less optimistic than males (5.83). And younger females (5.14) and divorced females (5.07) are even less optimistic.
Only one-third of respondents consider themselves financially “wealthy.” Females were less likely than males to think of themselves as wealthy (27% vs. 38%). And younger females were even less likely to say they’re wealthy (9%).
Two-thirds of respondents say a financial planner or adviser assists them in their investment or financial planning. This percentage grows to 72% for females. The next most frequent adviser is “Self” at 65%, and this drops to 54% for females. Married females are twice as likely as married males to seek advice from their spouse (65% vs. 32%). Younger females often look to their parents for advice (46%).NEXT: ROI trumps the investor’s social values.
Overall, nearly 60% of respondents would not accept a lower return on investment (ROI) just to invest in companies that have social values consistent with their own. Females are more likely than males (47% vs. 38%) to say they would accept a lower ROI from companies with social values that match their own, and this acceptance is even higher for younger females (51%).
In terms of risk tolerance, respondents skew slightly toward being more conservative when making investment decisions for their retirement plans. Nearly half say they are “moderate,” 31% say they are “conservative” or “extremely conservative,” and 21% say they are “aggressive” or “extremely aggressive.” Females tend to be more conservative than males (41% vs. 24%).
The most common activities done by men and women to help improve their future financial security are reviewing a retirement savings plan (71%) and meeting with a financial adviser (61%). Younger females are more likely than others to say they have done nothing in the past year to improve their future financial security (18%).
An online survey was fielded by Regions Bank from June 2 to June 14. The survey targeted an audience of roughly 9,000 private wealth management clients and 18,700 consumer/priority customers with estimated household income producing assets of $2 million or more. A total of 1,157 customers responded for a response rate of 4.2%. The survey was designed in conjunction with faculty at Vanderbilt University. The survey objective was to obtain deeper insights into the perceptions and attitudes of Regions’ customers.
More information about the Regions Women and Wealth study is available on the Regions website on www.regions.com.