What would investors’ ideal advisor look like? An older, white male, apparently. This certainly doesn’t come as a shock, given that the average age of advisors is around 55.
Spectrem Group recently conducted a study, asking investors to choose a financial advisor from a photo of eight adults, including four men and four women. The individuals in the photo range in age and ethnicity. Across wealth segments, investors selected the older male, wearing a shirt and tie but no jacket, more often than not.
Interestingly, the preference for the older male advisor declines as you move down the wealth spectrum. In the ultra-high-net-worth segment (with a net worth between $5 million and $25 million), 41 percent of investors chose Advisor 1. (See photo.) Thirty-five percent of millionaires (with between $1 million and $5 million in net worth) picked the older male, versus 31 percent of mass affluent investors (with between $100,000 and $1 million in net worth).
Investors’ second choice was Advisor 3, a young male wearing a jacket and dress shirt with no tie. According to Spectrem, he was the advisor-of-choice for 26 percent of millionaires, 23 percent of mass affluent and 22 percent of UHNW investors.
Other popular advisors included Advisor 7, a young blonde female wearing a blouse and jacket, chosen by 17 percent of UHNW, and Advisor 8, a young brunette woman wearing a suit and blouse, who garnered 12 percent of the millionaire vote.
An interesting experiment, but why do investors prefer an older, seemingly white male as their advisor? Perhaps he represents experience, a higher sophistication; he has, after all, likely been through more market cycles than the others. But the bigger question, in my mind, is why aren’t investors opting for Advisor 5, an older woman? She was selected by only 8 percent of millionaires.
It could stand to reason that it’s because there are fewer women in the industry—only 10-15 percent of advisors to be exact. But again, that doesn’t explain why investors are choosing the young blond and brunette as other top choices. Women, more so than men, are graduating with financial professional degrees and designations. And many large independent RIAs are run by women—many of which are over 55. See Wealthmanagement.com’s Top 50 Women-Owned RIAs in 2013.
That said, I’m at a loss for why the older female is not on the same playing field as the older male. What do you think?