For The Ladies (But Men Should Read This Too)

I have been in this profession long enough and I understand people well enough to know that men and women behave differently with their money.  It’s not rocket science.  Our bodies are different and our brains are different.  We think differently and we act differently. 

I have spoken and written at length about women and money.  Some women turn their noses up and say, ‘who is she to say I need to have a different conversation’.  Other women say ‘thank goodness someone is speaking my language.’

You can’t be all things to all people.  But today I am doing a little dance as I came across a research paper that shows everything I have known to be true about women and money to actually be true.


Women have always been categorised as more conservative than men when it comes to investing – studies show we keep more in cash and invest less.  We live on average around five years longer than men.  Less money invested and a longer life is a toxic combination.

It’s interesting though because I have never found my female clients to be any more conservative than my male clients.  In fact, I would say almost the opposite.  When women feel guided and educated, they happily invest their money and are much less prone to panic.  Thinking through the calls I have had from panicked clients over the years, I can’t think of a single one from a woman!

Now I know why.  It’s because I am a woman.  Let me explain the research.

A study in the UK by King’s Business School, Cass Business School and Exeter Business School looked at gender differences in investment risk tolerance, knowledge, confidence, and portfolio cash allocations among a sample of advised and self-directed wealthy individuals.

The researchers wanted to know whether financial advice and the gender of investors and their advisors are linked to the judgements that individuals make of their own risk tolerance, knowledge and confidence and also the proportions of cash they hold in their portfolios.

It turns out that there are gender differences but they are more complex than just ‘women are more conservative than men’. 

Overall wealthy women reported themselves to have a lower risk tolerance than men.  However, when the researchers controlled for the gender of their financial advisor, they showed that women with a female advisor reported the highest average risk tolerance level and the lowest average cash holdings of ANY subgroup, INCLUDING male investors with male advisors.

The gender of the financial advisor didn’t matter for the men in the study, but it did matter for the women. 

Women with male advisors report feeling less tolerant, less knowledgeable, having less confidence and held 11% more cash in their portfolios than women with female advisors. 

This is huge!

Gender differences are never clear-cut, or necessarily easy to explain.  We just know they are there.  That’s how I’ve always felt about my interactions with both men and women clients.  It is fantastic to see research and science getting more nuanced and showing how situational factors such as risk tolerance and confidence are, particularly for women.