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FlexShares Executive Investors Survey Reveals Key Gender Differences Among HNW Primary Breadwinners
FOR IMMEDIATE RELEASE
CHICAGO, July 30, 2019 -- FlexShares Exchange Traded Funds (ETFs) today announced the results of their first Executive Investors survey of primary household breadwinners, which found that high-net-worth (HNW) men and women defy traditional gender stereotypes when it comes to their perceived investing acumen, risk appetite, and work-life balance.
The survey of over 450 primary household earners found that executive women have a similar, if not greater, risk appetite to men when it comes investing, despite the long-held stereotype that women are more conservative investors. HNW men were twice as likely to identify themselves as a “conservative investor,” at 31% as compared to 14% of women. Overall, 26% of women surveyed considered their risk profile to be “moderately aggressive” or “aggressive,” as compared to 27% of men.
Furthermore, executive women are confident in managing their finances and investments, challenging popular assumptions that women are less interested in or capable of investing. When asked to rank their general investment knowledge on a scale of 1-10, the mean response for HNW women was a 7.3 out of 10, compared to a combined average of 8.1 for all respondents. Additionally, women ranked their ability to perform a range of financial planning tasks – such as managing investments, planning for retirement, and creating a budget – over 7.0 on nearly every activity. While men reported having even greater confidence – rating themselves over 8.0 on every task – both groups demonstrated high levels of financial knowledge.
“Many financial advisors continue to cling to outdated assumptions regarding female clients’ risk tolerance and overall interest in investing which may not be accurate for high-earning breadwinners,” said David Partain, Head of Marketing at FlexShares Exchange Traded Funds. “Understanding changing investor demographics and preferences is why we invest in proprietary advisor and investor research, which we hope will provide insights to our advisor clients to help them grow their businesses and offer extraordinary client experiences.”
When asked about their top two current financial goals, executive men and women reported significantly different priorities. While “providing for future generations” and “taking care of my dependents financially” were identified as two of the top financial goals among men at 70% and 62% respectively, women did not place as much emphasis on these goals at 30% and 38%. Instead, the top goal for women was “to know that I’m prepared for the worst” at nearly 69%, as compared to 31% of men. Women were also most concerned with “planning for retirement” (56%) and “making philanthropic contributions” (54%).
At home, male and female primary breadwinners reported taking on 50% or more of responsibility for caregiving of children, parents and adult dependents. Fifty percent of executive men reported that they’re responsible for a majority (more than 50%) of the elder care in their family (including managing care, transportation, and finances), as compared to 41% of executive women. Executive men and women also reported significant responsibility for childcare duties with 49% of men and 45% of women claiming to be responsible for a majority of childcare tasks. Despite this similar division of labor, men reported struggling more with managing their work-life balance than women. A third of men reported feeling guilty when they are at work instead of at home, compared to 21% of women.
“Our research found that high-earning individuals don’t fit the mold of existing gender stereotypes, whether it’s the fact that male and female breadwinners both report taking on significant responsibility at home or that these women report more satisfaction with their work/life balance,” said Laura Gregg, Director of Practice Management and Advisor Research at FlexShares. “It’s critical for advisors to put gender assumptions aside as they engage with HNW primary breadwinners. What we see is that these professionals experience their roles as primary breadwinners differently. Taking the time to ask first, rather than to assume based on gender, may help advisors stand out from the crowd and deepen client relationships.”
Advisor Experience for Executive Women
While studies suggest women tend to leave their financial advisor after divorce or death of a spouse, high-earning women indicated greater loyalty to their financial advisor than men. Only one of five women had thought about leaving their advisor in the past year, though two out of five men considered changing advisors. This may be due to the fact that HNW women take a more active role in selecting their family’s financial advisor than women in general. Women respondents were also significantly more likely than men (88% vs. 75%) to describe their relationship with their advisor as personal.
Women also had a much more focused view of the services provided by a financial advisor. Across the board, men felt more strongly about advisors’ ability to offer specialized services such as insurance, estate planning, sustainable investing solutions, and legacy planning. Men were also more likely to expect business management advice from their advisor (77%), such as corporate tax solutions or executive compensation advice, while 63% of women expressed interest in this service.
Despite these differences, there was notable interest in socially responsible investing (SRI) among both genders, with a majority of respondents (62%) ranking their interest in SRI as an 8 or greater on a scale of 1-10. While SRI is often considered to be of greater interest to women and millennials, men actually expressed more interest in SRI offerings at 7.5 compared to 6.8 for women.
About the FlexShares Executive Investors Survey
This survey intends to bring attention to the financial lives and wealth management needs of HNW individuals who act as primary income contributors. This survey was conducted in March and April 2019 and a total of 461 men and women participated. Participants were between the ages of 35-65 with HHI over $200K and investable assets over $1M or over $250,000 for those between 35-39 years of age. Average participant age was 47.
FlexShares Exchange Traded Funds are designed to pursue specific investment goals across both passive and active strategies. FlexShares offers differentiated ETF strategies that improve and simplify the investment decision process for the long-term investor. Follow us on Twitter @FlexSharesETFs.
About Northern Trust
Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of wealth management, asset servicing, asset management and banking to corporations, institutions, affluent families and individuals. Founded in Chicago in 1889, Northern Trust has offices in the United States in 19 states and Washington, D.C., and 23 international locations in Canada, Europe, the Middle East and the Asia-Pacific region. As of June 30, 2019, Northern Trust had assets under custody/administration of US$11.3 trillion, and assets under management of US$1.2 trillion. For more than 125 years, Northern Trust has earned distinction as an industry leader for exceptional service, financial expertise, integrity and innovation. Visit northerntrust.com or follow us on Twitter @NorthernTrust.
Northern Trust Corporation, Head Office: 50 South La Salle Street, Chicago, Illinois 60603 U.S.A., incorporated with limited liability in the U.S. Global legal and regulatory information can be found at www.northerntrust.com/disclosures.
Before investing, carefully consider the FlexShares investment objectives, risks, charges and expenses. This and other information is in the prospectus, a copy of which may be obtained by visiting www.flexshares.com. Read the prospectus carefully before you invest. Foreside Fund Services, LLC, distributor.
An investment in FlexShares is subject to numerous risks, including possible loss of principal. Fund returns may not match the return of the respective indexes. The Funds are subject to the following principal risks: asset class; commodity; concentration; counterparty; currency; derivatives; dividend; emerging markets; equity securities; fluctuation of yield; foreign securities; geographic; income; industry concentration; inflation-protected securities; infrastructure-related companies; interest rate / maturity risk; issuer; large cap; management; market; market trading; mid cap stock; MLP; momentum; natural resources; new funds; non-diversification; passive investment; privatization; small cap stock; tracking error; value investing; and volatility risk. A full description of risks is in the prospectus.