- Research shows that female investors tend to outperform men in the market.
- Despite this, only about one in five financial advisers are women.
- Female advisers may be better equipped to understand and address the unique financial concerns and needs of women.
- Top five trends in women and finance: job loss/career shift, relationship changes, rise in online investing for women, reevaluating meaning and legacy, and the impact of ESG investing.
- Female advisers are more likely to recommend ESG investing, which is becoming increasingly popular among investors.
Years of research show female investors outperform men, Blair duQuesnay, CFA, observed in her January 2019 New York Times opinion piece. Yet only about one in five brokers are women. duQuesnay acknowledged that while gendering any ability or trait can make people uncomfortable these days, there is ample evidence to support the idea that women might be better equipped to “help families nurture and protect their nest egg.”
This issue often comes up on my calls with women. Perhaps it relates to the fact that a significantly higher percentage of women have either lost their jobs or a big chunk of their employment income during the pandemic. Women of all ages are looking for new and creative ways to support themselves and their families and we are seeing a surge in the number of female entrepreneurs post-COVID. According to some early indicators, women are starting three-quarters of new businesses. I call this “The COVID Catapult.”
As I suggested in “Suddenly Single: How to Plan with Female Clients,” planning to be single might not be a fun conversation, but it is arguably a very important one given that 90% of married women will end up needing to manage their own finances at some point due to divorce or widowhood. This trend has only been exacerbated by the pandemic.
One of the questions I get asked most often is “Where can I find a community of like-minded women investors?” I’ve come across lots of different investing platforms around the world and they’ve been an incredible inspiration to many. I’m excited that women are signing up to investment platforms at faster rates than men. According to the Financial Times, “The lockdown period has reduced spending, increased savings and expanded the amount of time women have to think about financial planning.”
A survey of 1,000 US adults conducted by Parade magazine and Cleveland Clinic in June 2020 found that as a result of the pandemic most people have gained new perspective on what really matters. Sixty-five percent said the pandemic has made them re-evaluate how they spend their time and 58% said it’s made them re-evaluate their life goals. This idea of “what is meaningful?” comes up a lot in my conversations with women — young and old.
As pointed out in “Corporate Sustainability: Three Reasons Why It’s Even Better Than You Think,” investors are doing well by doing good: “As of 2020, ESG mutual funds hit $1.7 trillion, up 50% year over year, while firms committing to integrate ESG into their investing managed a collective $100 trillion.”
Female advisers are more likely to recommend ESG investing, which is becoming increasingly popular among investors.
