Do Financial Advisors Treat Male and Female Clients Differently When Providing Investment Advice?

Bucher-Koenen, Hackethal, Koenen, and Laudenbach (2024) examine whether financial advisors treat male and female clients differently when providing investment advice. They ask whether client gender affects fees and product recommendations, independent of actual client characteristics. Using administrative data from nearly 27,000 advisor–client meetings at a large German bank, along with client surveys, advisor surveys, and experiments, they find systematic gender differences. Women are about 6 percent less likely to receive fee rebates and 4–9 percent more likely to be recommended high-cost in-house funds. As a result, women face significantly higher ongoing investment fees, largely due to statistical discrimination based on perceived financial sophistication.

Why This Article Was Selected for The Policy Scientist

This article squarely addresses how gendered treatment by financial advisors can systematically alter economic outcomes for women. As households increasingly depend on professional advice for retirement saving, asset allocation, and risk management, differential pricing and product steering matter because they directly affect lifetime wealth accumulation. The authors, who have an extensive record in financial literacy and household finance research, make a timely contribution by documenting how advisor discretion converts gender differences into higher costs for women. The administrative data are unusually strong, capturing tens of thousands of real advisory interactions and reinforced by surveys and experiments.

Full Citation and Link to Article

Bucher-Koenen, T., Hackethal, A., Koenen, J., & Laudenbach, C. (2025). Gender differences in financial advice. American Economic Review, 115(12), 4218–4252. https://doi.org/10.1257/aer.20211024

Central Research Question

This article asks whether financial advisors systematically treat male and female clients differently when providing investment advice, and whether any observed differences reflect rational responses to client characteristics or discretionary behavior that disadvantages women. Specifically, the authors examine whether client gender affects fees, product recommendations, and overall advice quality even when men and women are similar in observable financial characteristics. The broader question is whether gender serves as a proxy for financial sophistication, price sensitivity, and confidence, thereby shaping advisor behavior in ways that influence long-run wealth accumulation. 

Previous Literature

The study builds on several strands of literature. One branch documents persistent gender gaps in financial literacy, confidence, risk-taking, and investment behavior, most prominently associated with work by Lusardi and Mitchell and subsequent extensions by Bucher-Koenen and coauthors. Another literature examines conflicts of interest in financial advice, showing that advisors often steer clients toward higher-fee products that benefit advisors or their institutions, even when these products underperform. Prior work has also framed financial advice as a credence good, where clients cannot easily evaluate quality. This article contributes by linking these literatures and moving beyond outcomes to institutional behavior, showing how advisors translate perceived gender differences into pricing and product decisions. While earlier studies document mis-selling or underperformance, fewer directly examine gender as a driver of advisor discretion in real-world settings.

Data

The data are a central strength of the paper. The authors use administrative records from a large German retail bank covering nearly 27,000 advisory meetings between 2010 and 2017, involving over 13,000 clients and more than 4,000 advisors. These records include detailed documentation required by German securities law, such as recommended products, fees, rebates, and written justifications. The administrative data are matched with client demographic and portfolio information, allowing comparisons across clients receiving advice from the same advisor for the same products. The study is further strengthened by three complementary data sources: a client survey measuring financial literacy, confidence, and motivations; a professional advisor survey capturing beliefs about client sophistication and price sensitivity; and a randomized survey experiment with advisors that manipulates the visibility of client gender. Together, these sources allow the authors to triangulate behavior, beliefs, and mechanisms.

Methods

The empirical strategy relies primarily on multivariate regression models estimated at the recommendation or meeting level, with extensive fixed effects. Advisor fixed effects, product fixed effects, and time fixed effects allow identification of gender differences within the same advisor recommending the same fund at the same time. This approach sharply limits many confounding explanations, such as differences in advisor quality or product availability. Outcomes include whether a client receives a rebate on upfront fees, whether in-house or high-fee multi-asset funds are recommended, and the fee rank of recommended products within risk categories. Although the core analysis is observational, the paper goes beyond standard regression by integrating survey evidence and a randomized advisor experiment. In the experiment, advisors evaluate matched male and female client profiles that differ only by gender, allowing cleaner inference about the role of gender as a signal. While the study does not include a randomized field experiment, the combination of administrative data and experimental evidence strengthens interpretability.

Findings/Size Effects

The results show consistent and economically meaningful gender differences. Female clients are approximately 5.7 to 6.6 percent less likely than men to receive a rebate on upfront sales fees for the same fund from the same advisor. Women are also 4 to 9 percent more likely to be recommended in-house multi-asset funds, which carry substantially higher annual expense ratios than alternative funds. As a result, recommendations to women involve significantly higher ongoing fees, even after controlling for risk category and client characteristics. These differences are driven almost entirely by advisor discretion rather than differences in stated preferences or adherence behavior. The effects are stronger for male advisors, though female advisors also display some differential treatment. Survey and experimental evidence indicates that advisors perceive women as less financially literate, less confident, and less price sensitive, and they use gender as a proxy when setting fees and recommending products. When advisors are given explicit information about client financial literacy, gender-based differences largely disappear.

Conclusion

This article provides compelling evidence that gender shapes financial advice through discretionary institutional behavior rather than through explicit policy or product design. By documenting how advisors use gender as a signal for financial sophistication, the study shows how small differences in pricing and product steering can translate into meaningful long-term cost differences. The contribution is not merely descriptive; it clarifies a mechanism through which well-documented gender gaps in financial outcomes may be reinforced by market intermediaries. While the observational nature of the core analysis limits definitive causal claims, the experimental components substantially strengthen the argument. The findings are likely to generalize to other bank-centered advisory systems where advisor discretion and opaque pricing are common. Future research using randomized advisor–client matching or field experiments would further sharpen causal inference and deepen understanding of how institutional design interacts with gender in financial markets.