Women’s investible wealth to hit $72 trillion globally by 2020

The message is very much clear from S&P’s Global report titled The (Financial) Future is Female, women’s influence as investors in the global financial markets is growing significantly and has grown over the past 40 years.

Due to this growth, the report concluded that more has to be done to consider the approach women take to their finances and the issues they care most about.

In 10 out of 11 countries surveyed by S&P, women said they are less prepared than their male counterparts to weather a financial setback. 32%-45% of women said they would have to make some lifestyle adjustments within one month if they were suddenly unemployed or unable to work.

The S&P report also highlighted some characteristics of female investors – women are more likely than men to weigh a company’s environmental and social impact when making investment or purchasing decisions.

What other traits do women have when it comes to investing?

Casey Lord, head of product at Nutmeg cites some research from Warwick Business School: “Warwick Business School found that, typically, women only traded their investments nine times a year, compared to 13 for men. Professor Neil Stewart, who led the research, said this shows women tend to invest to support long-term goals, rather than simply for the thrill of investing. As a result, they were more likely to achieve better returns, he argued.

Lord adds: “Various studies have found that women tend to avoid speculative, high-risk punts in favour of investments with a decent track record. While this may sound a little boring, clearly there’s a reason these slow and steady investments have performed so well in the past. Having said that, past performance is not always a guarantee of future riches.

“You’re better off spreading that £10,000 over a number of different shares and/or funds, so that if one of your investments isn’t performing, the others will hopefully compensate. This diversification is something women tend to do more than men.

So how is change going to be achieved globally? To make investing more inclusive for women, and the financial services industry more diverse and equal.

Financial services firms in the UK have already begun trying to communicate more with women by recruiting more women to the industry, and encouraging diversity.

In 2017, the government launched the ‘Women in Finance Charter’ which asked financial services firms to implement several key points: to commit firms to supporting the progression of women into senior roles in the financial services sector; to recognise the diversity of the sector; to publicly report on progress to deliver and accountability drive change.

Lena Patel, director and chartered financial planner at ISJ Financial Planning said in a recent interview with Adviser Points of View that the industry needs “fresh blood” – a younger and more diverse range of financial planners and advisers.

Patel goes on to say, that women who have just got divorced, need to be catered for, for example. Divorcees might want some advice on how they deal with their finances post-divorce, from a female financial adviser instead of a male financial adviser.

Despite these efforts, true gender equality is a long way off sadly.

First seen on www.adviserpointofview.com