Artificial intelligence is revolutionizing the world of Financial Advising

We know that artificial intelligence is revolutionizing the world of work. What is less known is that almost all areas will be impacted. If we take the world of insurance for example, today, artificial intelligence makes it possible to extract the important information contained in a file but also to analyse the type of claim involved, and to understand if it is or not covered by the insurance policy. All this is done without the slightest effort and without incurring the slightest cost. Artificial intelligence is also capable of sorting out relevant data, which can then be imported into a complaints database, helping agents to initiate the appropriate complaints process. However, artificial intelligence has limits and in the end, at least for the time being, the final decision is still human. In the world of finance and more specifically with regard to the work of financial advisers, banks and other financial institutions are constantly increasing their investments. Artificial intelligence reduces the tedious work of understanding the context and frees up time for advisors, allowing them to focus on value-added tasks. Artificial intelligence has its limits it is a reality, but it also makes it possible to reduce human errors, to accelerate the speed of responses and thus the satisfaction of the customer. Artificial intelligence is there to assist the advisor in his decision-making by identifying any inaccuracies, the risks of fraud, and by optimizing the relationship between profit, profitability and customer satisfaction. Hedge funds are using AI to beat the stock market, Google is utilizing it to diagnose heart disease more quickly and accurately, and American Express is deploying AI bots to serve its customers online.

Women clearly do not have the same behavior as men in the financial field. This is not a prejudice, but rather a proven reality. Women (of course not all) tend to be risk-averse and this has an impact on their retirement. A recent study by the prestigious Cass Business School has once again proved this difference between men and women when it comes to taking financial risks. In this study, academics analyzed the individual attitudes of many groups of people to risk and financial loss. At the microphone of RTL Christine Lagarde, former president of the IMF and now at the head of the ECB, marked the spirit by declaring "If we had Lehman sisters and not only Lehman Brothers, we would probably have carried a little better." However, it would also be possible to say that these Lehman sisters would have had much smaller profits in all the years preceding the bankruptcy of the financial group. Ms. Lagarde wanted above all to highlight the need to have more women in positions of responsibility in the world of finance. She emphasized the lack of risk-taking that seems to be more important for women than for men. In a way, the researchers from the Cass Business School and the University of Bristol abound in the direction of Ms. Lagarde. The study of the Cass Business School led to the following conclusions: • Women tend to have greater risk aversion than men, which confirms the findings of existing research. • Young and older people tend to be more risk-averse than middle-aged people. Young people are particularly reluctant to face financial loss. • Stress plays an important role in financial decision-making. • Risk aversion and loss aversion are even lower as the level of understanding of a person's finances is high. • Upper-class members are less risk-averse and more willing to take risks than lower-class members.

Financial advisor: a job for men?

When you look at the entry-level echelon, women occupy roughly half of the positions of financial advisors. Interestingly enough this statement is true in most countries regardless of the wealth of the country. However, when you start to look at higher echelon, and more precisely in the executive positions, you find out that women occupy only 20% of the jobs. As McKinsey's stated recently in a very interesting study: "the more women progress in their careers, the more women lose ground to men: they are 24% less likely than men to be promoted in their firm. And this, even if they are as numerous as men to have ambition." Does this all mean that financial advisor is a job for men? Obviously not. It rather means that there is still a long way to go before equality can be reached between the two genders in this industry. We have had experiences with many financial advisors in order to compile our rankings tables and identify the best independent financial advisors in different countries, and it's true that overall we have been much more in touch with men than with women. Nonetheless, our experience and the clients' reviews that we could obtain show that clients do not rate their financial advisors differently depending on his/her gender. In other words, gender does not make a difference in being a good or poor financial advisor.

Women in the financial advisory industry

In the Financial advisory industry, men outnumber women not only in terms of the number of financial advisers but also in terms of the number of clients. Women do control roughly a quarter of all the wealth of the occidental world. Women earnings are also increasing at a higher rate than that of men and this is true in almost all the countries of the world. Women have also more degrees than men which could lead them to even faster earnings rise in the next future. It is also worth noting that 40% of women earn an income equal to or greater than their husband. So there is no doubt that the potential for more and more female clients for financial advisers worldwide is not a possibility but much more something certain. However, when we look at current statistics about financial advisors clients we see that a large majority of clients are males. But there is another interesting aspect of this topic: looking at the side of financial advisors themselves. What we find is that more than 80% of financial advisors are men. So basically we find the same proportion of men and women on both sides of the client/advisor relationship. These numbers mean that many women have money but do not use financial advisors but also that few women end up being a financial adviser. One of the reasons behind this lack of women in the financial advisory industry is that many more men study Finance in university.