Small business owners prefer to speak to financial advisors of the same sex, with men exhibiting a stronger gender bias than their female counterparts, notes study results released today by The American College, a non-profit educational institution devoted to financial services.
The study, conducted during Q3 2011 by the State Farm Center for Women and Financial Services at The American College included interviews with 1,255 participants (835 women and 420 men), and revealed that there is a disconnect between the preference for female financial advisors by women business owners and the gender composition of the financial advising community.
According to the results, 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. Further data from the U.S. Bureau of Labor Statistics holds that in 2010, only 30.8 percent of women were personal financial advisors.
Conversely, 75 percent of men queried said they prefer to speak to male financial advisors while only 40 percent of women exhibit the same preference. (Margin of error is +/– 3.3 percent for females and 4.7 percent for males.)
Statistics from the Center for Women’s Business Research further confirm that of the 10.1 million businesses in the U.S., women own 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. “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 provided by The College:
• Many have not estimated how much capital they will need to be able to retire (34 percent women vs. 26 percent men).
• Only a few have a formal, written financial plan for managing income and expenses in retirement (24 percent women vs. 34 percent men) or have a formal, written plan for transitioning their business at retirement (11 percent women vs. 28 percent men).
• Most small business owners have not consulted with an advisor about retirement planning (44 percent women vs. 33 percent men) but those who have report being satisfied with their advisor relationship (76 percent women vs. 85 percent men).
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