The macro-financial literature has explored two opposing hypotheses on the financial-inequality linkages. While the equalizing hypothesis takes an optimistic view of financial deepening, the alternative hypothesis, with a multidimensional view, considers the expected favorable distributional outcomes of financial development conditional on the development of various dimensions of financial development (depth, access, and efficiency) in different sub-sectors of the financial system (institutions and markets). This paper, by applying the Dynamic Ordinary Least Squares (DOLS) method, tests these hypotheses over 1980-2021 in Iran. The findings indicate that only the “Financial Markets Access” has reduced inequality in Iran. On the contrary, other dimensions of financial development have increased inequality. Multidimensional Financial Development, Financial Institutions Development, and Financial Markets Development indicators have also had “disequalizing” outcomes in Iran. Financial Institutions Development and its various dimensions have larger negative outcomes, compared to Financial Market Development and its dimensions, on income distribution in Iran, which is expected in a “strictly unbalanced” bank-based financial structure. Therefore, financial development through the separate development of these dimensions cannot act as an “equalizing” factor. These findings support the design and implementation of a “balanced financial development” strategy and reform towards a “balanced financial structure”.