Financial Advisors’ Unconscious Bias Works Against Women

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Financial advisors are more likely to focus on the man when straight couples seek financial … [+] guidance. getty Despite women taking more of a lead role in family financial decisions, a new study reveals that financial advisors are still stuck in the past, adhering to stereotypes that have men […]

Despite women taking more of a lead role in family financial decisions, a new study reveals that financial advisors are still stuck in the past, adhering to stereotypes that have men in the driver’s seat when it comes to finance. From advisors’ comments to who gets more eye contact in meetings, it’s clear that unconscious bias still favors men in the finance world.

A new study by Merrill Lynch Wealth Management reveals that 63% of married women under the age of 45 say they are the primary financial decision makers in their households. For married women over 55, 37% identify themselves as the household’s financial decision makers. By contrast, two decades ago in the year 2000, only 12.8% of women reported that they had the final say when it came to finances.  Although young women are taking a larger role in finances, when straight couples meet with their financial advisor, the men are still assumed to be in charge. What makes it worse, is most financial advisors were unaware that they displayed any gender biases.

Financial Advisors Look At Men More Than At Women

The Merrill Lynch researchers attended live meetings between heterosexual couples and their financial advisors and implemented eye-tracking software to determine where the financial advisors’ eyes were focused during the meeting. Both male and female financial advisors spent over 60% of their time focused on the man, and most were unaware of their own biases. 

When asked about gender bias more generally, the advisors were aware that it was a problem that likely plagued many financial advisors, but felt that their own behavior was free from bias. Tracking eye movements is a clever method to uncover this type of unconscious bias that impacts behavior without our awareness. The financial advisors aren’t intentionally favoring men, they don’t even realize they are favoring men, yet their eyes reveal their unconscious notion that that men are more likely to be the decision-makers. Interestingly, even female financial advisors gave more eye time to the men.

Advisors Average Ten Sexist Comments Or Acts Per 30-Minute Meeting

In addition to measuring the eye tracking, the researchers logged a whopping ten sexist comments or actions per 30-minute meeting with a financial advisor.  The most common of these missteps included assuming the man was the decision maker, assuming the woman wants direction, assuming the couple’s finances were merged, assuming that the woman was more risk-averse and assuming women are less knowledgeable than men about investing. Many of these biased assumptions went unnoticed by the clients.

Clients React To Male And Female Advisors Differently

Male and female clients also respond to male and female advisors differently. Women are more confident with female advisors and are willing to take on more investment risk with a female financial advisor. Women also take more control of their own finances when working with a female advisor. Men, by contrast, are willing to assume more risk when they have a male financial advisor.

In sum, these research findings exemplify how unconscious bias plays out in the real world and underscore how difficult it is for financial advisors to overcome these ingrained stereotypes. Awareness is a great first step in the process. Realizing that they may be unconsciously offering more eye time to men or unintentionally making sexist remarks may help them become more aware of their behavior in the future.

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