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Investment Equality: Women and Wealth

Posted by Claire Phillips, Financial Planning Director

International Women’s Day earlier this month was marked with marches and demonstrations to protest against global gender inequality. One of the more familiar and well-publicised measures of inequality between the sexes is the gender pay gap data. The most recent figures from the Office for National Statistics show that the gap has narrowed to a record low this year (9.4 per cent) but it’s still a depressing fact that women earn significantly less than men.

Despite this, when you look at the broader financial picture and to other financial touchpoints like who draws up the household budget and who takes responsibility for savings, it’s often women who make the majority of these decisions. The finance and investment world has too long been labouring under a host of, at best, old-fashioned notions about women’s attitudes towards investing (too cautious, too indecisive, too emotional). Isn’t it time that women stopped being misrepresented and overlooked by the investment industry?

Challenging the Stereotypes

The evidence to challenge these tired stereotypes is everywhere. On management of the household budget, a report from 2012 undertaken by the Department for Work and Pensions on the way that couples make financial decisions found that women are typically the ‘alpha’ partner in a relationship. They are the ones responsible for making the key financial decisions and carrying out the research. On savings and financial planning, a survey carried out by UK investment advisers found that 51 per cent of women have savings accounts, compared with 50 per cent of men and 40 per cent have cash ISAs, compared with 41 per cent of men.

There’s not much current information out there about women’s wealth ownership in the UK which perhaps tells its own story and speaks to my point to some degree. However, a report published in 2016 found that women controlled a third of all wealth in North America, predicting that they could go on to ‘control as much as 67% of all financial assets by 2020. Almost 40% of women out-earn their husbands and almost half of those with $500,000 or more to invest are women.’ The same report highlights the growth of women’s economic power with successful business women accumulating sizable assets and wealth. It predicts that 90% of females will be the sole financial decision makers at some point in their lives and anticipates them being exclusively in charge of managing the assets for an average of 16 years due to differences in life expectancy.

Global career advisers Right Management’s 2015 research report ‘When Women Lead, Businesses do Better’ examined how women-owned businesses can be powerful models for other businesses. It found that almost half (45%) of all SMEs are now majority or equally-led by women and between 2006 and 2010 female-led SMEs accounted for £50bn of UK economic output.

There’s plenty of research out there suggesting that women make better long-term investors than men. However, despite this, and the wealth of positive evidence on household financial planning, wealth ownership and business success the investment industry is failing to connect with women.

Relating to Female Investors

So, why is this happening and what we can do about it? Part of the problem seems to surround how the investment industry presents itself in ads and marketing. Strategy consultancy Britain Thinks carried out some research for the Financial Times on why the finance industry was failing to attract female investors. It found that marketing campaigns are typically aimed at older men. The survey, which polled 2,000 male and female investors, pointed to ‘jargon-filled’ ad campaigns which failed to relate to women.

As an industry, we need to rethink how we present ourselves and make sure we relate to women in a way that they will respond to, not just as a niche market to pay lip service. We need clarity and openness and to seek methods which help women invest without fear or apprehension. There are a wealth of tools out there we can use to demystify and bring these topics to life – things like videos and website tutorials, online tools and smarter use of social media. We should strive to be relatable in our communications and to think always about how to ensure all sectors of our audience understand the message: that investing is open at all.

From the straightforward language we use, to the accessible layout of our website, from our lifestyle-centric approach, to putting strong client relationships at the heart of our business, I’m proud that at First Wealth we’re taking positive action to engage with female investors. At the end of the day, good financial planning to achieve your lifestyle goals is not just for men, it’s not just for women, it’s for everyone.

If you need help from a chartered wealth manager and financial planner, please contact me at claire@firstwealth.co.uk.

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This document is Marketing Material for a retail audience and does not constitute advice or recommendations. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested

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