Female wealth is rising, yet few women invest in shares and funds choosing the safe haven of cash instead
The rise of female wealth is a well-trodden topic with a number of reports detailing just how big an opportunity this represents. The Centre for Economics and Business Research revealed last year that more than 50% of UK millionaires will be female in just five years' time, for example.
Yet this demographic is still behind when it comes to investing, with more women likely to save cash in low-interest bank accounts, rather than invest in stocks and shares that offer the potential for much higher returns over the long term.
Given the ever growing role women will play in earning and controlling future wealth, this needs to change. In particular, it falls to the adviser community to harness the opportunity at hand and help draw more women to the industry, according to panellists on Investment Week's latest Diversity Debates series.
Featuring The Wisdom Council's recent ‘Yes She Can' research report, chief executive Anna Lane highlighted the significant commercial opportunity at hand for advisers when it comes to women investors and why more women needed to invest in order to secure better financial future.
"Our research showed that it is not that women make a conscious decision to not invest financially; instead it is something they simply haven't considered. So nine out of ten women [have not considered investing]," Lane told panellists from EY, HSBC Global Asset Management and AberdeenStandard Investments, all of whom partnered on the research.
EY associate partner David Holton believes the issue runs deeper, stating the industry is not speaking the right language for women. In fact, many advisers are having the ‘wrong' conversations when it comes to this clientele and this can result in some women being put off from investing as a whole.
"There is interesting research that shows women tend to want to see more data and information [before making an investment], whereas quite often men will make decisions based on the available information at the time," he explains. "When you think about the way the industry communicates with investors, there is quite a lot of jargon out there and we have got to a point where there is so much focus on regulation and compliance that the content for investors is also written in those terms. And we are losing women in that process."
HSBC Global Asset Management's Smera Ashraf, agrees. "When you think about how women engage with financial services - or any brand for that matter - it is through connections, friends and family recommendations. And traditionally how we have sold products is through an adviser community. But that community has a set demographic they speak to again and again, and it is not widening out [to include more women]."
Indeed, Ashraf was keen to point out that contrary to popular belief, the lack of women investors is not due to women's lack of confidence when it comes to money. Whilst The Wisdom Council's research suggested women like to take a more nuanced and controlled position when investing, often when women do invest they are just as good as men in achieving returns.
Lane explains: "Everything you read about in the media is that women lack confidence when it comes to investing. That is simply not true. When they do invest they do very well, they are not all investing in cautious funds. However, at the moment, investment is simply not on their radar."
To watch the full Diversity Debates video series on women in investment, click here: