When you think of the word ‘investor’, what image comes to mind? Is it men and briefcases? The overwhelming evidence among millennials, and women in particular, is that they do not feel that investing is for them or that it is even accessible.
One thing that has become abundantly clear since I started my new job in financial services PR, is that I don’t invest and neither do any of my female friends. Why is that?
Research at the Financial Times has found that women feel that the majority of investing adverts are aimed at men or people who can invest large sums of money, so they switch off. However, that does not mean that women aren’t interested in investing, quite the contrary. A survey conducted by BlackRock in 2015 showed that millennial women were more concerned about growing wealth than their baby boomer counterparts (hi mum). More than that, according to a BritainThinks survey for the Financial Times, women want to understand investments, but get bogged down by the jargon which leaves them feeling less confident in investing.
I don’t invest and neither do any of my female friends. Why is that?
While there is a real gap in the market for offering financial advice to everyday women, the likes of Ellevest are trying to fill this niche, not only by talking women through their goals but also through what a lifetime salary curve might mean to them. A lifetime salary curve is the rate and way your wage increases throughout your lifetime, and – due to child rearing and family life – means female and male expectations of wage growth can look very different. The service Ellevest provides is only available in the US at the moment, but expect to see similar services popping up in the UK over the next few years.
The other surprise here is that, according to the Telegraph, women are more successful investors than their male counterparts – being less likely to hold onto underperforming stocks, and not taking too long to sell when shares are doing well. This is because, according to the 2001 study, ‘Boys will be boys: Gender, overconfidence and common stock investment‘, women are much more likely to research potential investments before taking the plunge rather than gambling money on any sort of ‘tip’ from a friend or colleague.
I think one of the biggest hurdles ahead for the financial services sector will be to move away from the image of the man with a suitcase.
What women have also been doing well, according to the ‘Women make better investors’ article in the Telegraph, is saving money in cash ISAs. This is because they believe this to be a safer alternative than putting their hard earned cash into stocks and shares, they are concerned by the risks rather than the potential return, and believe that investing is less profitable than counting on a savings account.
So, the question is; what will get millennial women, like you and me, into investing?
I think one of the biggest hurdles ahead for the financial services sector will be to move away from the image of the man with a suitcase. I would also like to see more plain-speaking explanations about investing, without the jargon, and without sounding patronising. It will take a while to build up trust, but with a slew of female orientated fintech apps and services arising, it will be interesting to see how the investment landscapes changes as it accommodates more women.