Women get worse investment advice
There are plenty of differences between men and women; how they invest their money, how they deal with risk, etc. But given the same circumstances and risk preferences, men and women should get the same advice from their financial advisers. Guess what? That doesn’t happen.
A group of German researchers got access to data from some 27,000 real-world meetings between financial advisers and their clients. Additionally, they anonymously sent actors to 539 advisers to get financial advice. The chart below shows the mystery shopper profiles. Note that in each row, you have a man and a woman with a very similar profile, where the only reasonable difference is the gender of the client.
Client profiles in mystery shopping experiment
Source: Bucher-Koenen et al. (2025)
As you might have guessed, the advice differs by gender:
Women are some 6% less likely to receive a rebate on a fund they invest in, and if they get a rebate, the rebate for men tends to be some three percentage points larger than the rebate offered to women.
Women are some 5% more likely to get a recommendation to invest in an in-house fund (where the bank tends to make more money in fees) than men, and a roughly 3% higher likelihood of being recommended an in-house multi-asset fund, and the amount invested in these in-house multi-asset funds is on average a 3.5 percentage points larger share of the total portfolio.
Within each fund category, 63.3% of men get a recommendation to invest in one of the most expensive funds in its category, but 73.2% of women do.
So, women tend to get fewer rebates and invest in more expensive funds. This is, by the way, not a result of male advisers exploiting female clients. Female advisers do that as well. Instead, the analysis suggests that advisers use gender as a proxy for financial sophistication and consciously, or subconsciously, assume that women are less sophisticated than men. Plus, advisers are incentivised to sell higher margin products, so if you encounter a less sophisticated client, the temptation is to sell them a seemingly simpler, but more expensive product like an in-house multi-asset fund.
This is terrible. Here is a similar research where AI recommends less equity exposure simple because a hypothetical investor's profile mentions "female" in the gender, ceteris paribus.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=6311499
The recent French trial exposing a husband’s gross infidelity to his wife or the doctor in Hawaii who tried to push his wife off the cliff, make it important that we all try to defend women’s right to be served the same as men. Those acts are more outrageous, but even smaller things like this need to have zero acceptance by all so that the larger point is made. How did women, who alone can create babies, become beset by injustice. It’s sad.