Design Solutions To Attract Female Investors

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Women are investing in plain sight. But to look at the numbers, you would think that wealth managers can’t see them.  Less than half of online women in the US are investors compared to 60% of online men.  Those that do invest also tend to have fewer and less varied investment products than men.  To close the gaps between women and men, wealth managers require more inclusive marketing, products, and strategies that consider women’s specific investment needs.  Here are three highlights from a recently published a report about this critical demographic:

  • Women are more risk-averse. Women in the US tend to be less willing than men to take investment risks in hope of better returns. They are less open to investing in risky assets like stocks, cryptocurrencies, and commodities.  Since women live longer their risk-aversion runs counter to their needs.  Accepting lower investment returns now lowers their potential cash flows later in life.
  • Women feel less knowledgeable about investing – and the jargon does not help. Choosing investments in the absence of complete information is challenging for anyone, and the amount of jargon (e.g., “robo-advisors,” “alpha,” “crypto,” etc.) makes the choice even more daunting. These challenges are acute for female investors – only half of online women in the US feel knowledgeable about how to manage their personal finances compared to 60% of men, and only 45% know how to save for retirement as compared to 58% of men.
  • The level of self-directedness varies dramatically between men and women. Women in the US are less likely to do their own research when making investment decisions and are less likely to make investment decisions on their own. Yet, women and men rely equally on advice from financial professionals. If firms can close the marketing and research gaps, they can expand the group of female investors who rely on advice.

Be sure to check out the full report, which includes insights on female investor behaviors, their digital preferences, how they make investment decisions, and the actions wealth managers must take to create opportunities for greater financial inclusion.

 



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