Women who receive financial advice see a 27 per cent increase in their financial management ability over the course of an advice relationship, according to a new white paper released by the AFA.
This is the principal finding of Money, wellbeing and the role of financial advice: A gender-based approach, research conducted with the support of TAL and based on research undertaken by the Beddoes Institute.
The research also revealed there are significant health and wellbeing benefits from a gender-based approach to financial advice for people – both men and women – with low financial literacy.
"What we know from this study is that thinking about money can have a significantly greater negative influence on a woman's overall health and wellbeing than that of a man's," AFA chief executive Brad Fox said.
"This paper is a turning point for the profession," Dr Rebecca Sheils from the Beddoes Institute said.
"It provides new direction for how financial advisers work with their male and female clients to drive deeper engagement and advocacy of financial advice as well as providing clear and compelling evidence about the improved health and wellness from financial advice that can be used to encourage more consumers to enter an advice relationship."
This inter-relatedness between finances and health and wellbeing, especially for people with low financial literacy and women in particular, and the positive impact that financial advisers have on their clients' ability to manage their money highlights the important role that financial advisers play in improving the lives of their clients and contributing to the health and wellbeing of the Australian community.
"The age of a 'one size fits all' approach to financial advice has clearly passed," Mr Fox said.
"The present and the future of great financial advice lies in tailoring advice, advice relationships and the adviser's style specifically to individual clients' preferences which can be indicated by age, life-stage and gender."
Segmentation of clients and targeting new markets using these findings will increase the success of practices' growth strategies helping more Australians to receive financial advice and increasing the confidence, health and wellbeing of the community.
"This study is really powerful for the financial advice profession because it shows that female clients offer significant growth potential for practices," said Mr Fox.
"The research has found women's financial management ability tends to improve more from an advice relationship than men which means they are likely to have greater satisfaction and stay with their advisers longer."
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