Moira O’Neill asks five female financial professionals why women tend to shy away from investments.
Women are less likely to invest than men, with only two in 10 aged 40 to 55 holding money in the stock market compared to over a third of men in the same age bracket.
The survey of more than 6,000 people undertaken by consumer website Boring Money in September 2017 also found that the three major barriers to investing are confidence, willingness to engage, and time.
But what are the main factors that put women, in particular, off investing? At Moneywise, we don’t think women need ‘pink’ brochures or female advisers. Women, like men, just want jargon-free friendly communications, and the industry is not good at that.
Helena Morrissey, head of personal investing at Legal & General Investment Management, says: “It’s not just the UK that suffers from a lack of engagement by women.
“Women know what they don’t know. So they don’t open an individual savings account (Isa). Men wouldn’t necessarily admit what they don’t know.
“We should ditch acronyms. We completely forget that people don’t know what the regulator is and that they don’t know terminology that seems second nature as an investment professional, such as ‘compounding’ and ‘volatility’.
“Often you are sent a booklet to understand the letter you’ve received. That can’t be right. The first four pages are about the acronyms you’re about to read. And then the first paragraph starts with an acronym that wasn’t in the first four pages.”
Alexandra Johnson, fund manager at Rathbone UK Opportunities, says: “I think it’s about knowledge and confidence. The industry has been hit by a lot of scandal, fines and regulation. This tells people that it’s an industry that can’t control itself. We talk about the risks of banking and finance so much that we’ve forgotten to tell a generation or even a gender that it’s important to invest.”
Maike Currie, investment director at Fidelity International says: “You need female representatives and fund managers. We don’t have a female version of [star fund manager] Neil Woodford. Well, you may argue you don’t want that. But there’s no equivalent to Warren Buffett either.
“Women are good with money because we do save. Women hold more Isas than men, but women tend to hold Cash Isas and men hold Stocks and Shares Isas.
“Women have all the attributes that make us good at investing – strong convictions and a tendency to buy and hold. Men trade more – you could argue that men are responsible for stock market bubbles.
“Women taking a break to raise a family or be a carer for older relatives impacts on families; there’s the thorny issue of the gender pay gap.
“But the structures, products and investing rules have been put in place by men and don’t account for these issues.”
Jane Goodland, responsible business director at Old Mutual Wealth, says: “If men are from Mars and women from Venus, it’s not surprising that the sexes approach their finances fundamentally differently from one another. Our research shows that, in general, women tend to be slightly more risk averse than their male counterparts.
“It’s not just risk appetite that varies between men and women, they also have different priorities for their money. For example, women are three times more likely than men to retire for family reasons.”
Claer Barrett, editor of Financial Times Money, says: “It’s very boring to be told not to spend on handbags and dresses, and to put it into a pension. When you’re in your 20s and 30s and have a bit of spare cash to invest, you need a big advert to push you to do it.
“Why don’t investment firms join up with Tampax or Always Ultra to promote the idea of monthly savings? If someone was brave enough to go ahead, then people would talk about it. “I’ve seen research with women who didn’t invest. They said investment adverts were for rich, old men. They objected to the ‘Profit hunter’ adverts from investment management house Artemis, but they did like adverts from online investment management service Nutmeg, featuring animated bears.”
What puts you off investing? Email editor@moneywise.co.uk.
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