Women are given worse guidance from their financial advisers than men, according to research that suggests female clients are treated by the industry as being less sophisticated.<\/p>\n
A study that examined data from 27,000 meetings between advisers and clients at a big German bank, and also involved a mystery shopper exercise, found that women were more likely to be recommended to invest in in-house funds where the bank earns bigger fees and were also less likely to receive a sales fee rebate.\u00a0<\/p>\n
The findings, which were first published in the American Economic Review, suggest that \u201cadvisers use gender as a proxy for financial sophistication and consciously, or subconsciously, assume that women are less sophisticated than men\u201d, said Joachim Klement, a strategist at the stockbroker Panmure Liberum, who drew attention to the research on Tuesday.<\/p>\n
\u201cThis is, by the way, not a result of male advisers exploiting female clients. Female advisers do that as well,\u201d Klement said of the tendency to provide self-interested recommendations.<\/p>\n
\u201cAdvisers are incentivised to sell higher-margin products, so if you encounter a less sophisticated client, the temptation is to sell them a seemingly simpler, but more expensive product like an in-house multi-asset fund.\u201d<\/p>\n
The research adds to scrutiny of the financial advice industry at a time when the UK is trying to overhaul the way Britons approach saving and investing.<\/p>\n
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