Women are more risk averse than men when it comes to managing their finances, new analysis from Dynamic Planner has found.
The analysis, based on the platform’s psychometric client profiling questionnaires, found that across all elements of financial personality, men consider themselves to be more risk-seeking, more fearful of missing out on investment opportunities and able to tolerate the ups and down during their investment journey. They also show stronger positive emotions towards taking risk but have a weaker desire for certainty in comparison to women.
Both women and men are similar in their views on retirement income preferences, the analysis showed, however, women care more about leaving something behind after they’re gone and having a fixed income. For men, having flexibility in the amount of income they can take each year is more important than both of those factors.
Women were also found to be more willing than men to cut back their expenditure during retirement, but less willing to return to work or access income from another source.
More than half (56%) of women said they were not ready to commit to a retirement plan and make lasting decisions about their retirement plan, compared to 54% of men who said they would.
However, Dynamic Planner said its analysis showed women appear to benefit more from advice in terms of their emotional resilience, emotion during uncertainty and emotion regulation. They appear to dwell less on their problems after receiving advice and are more optimistic about investing, the firm said.
Dr Louis Williams, head of psychology and behavioural insights at Dynamic Planner, said: “The next steps within the industry should be to identify what elements of financial advice are particularly driving this positive difference in order to create interventions tailored to enable women greater inclusion in financial planning and increased confidence and resilience.”
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