Dipika Khaitan is the Co-founder Chief Operating Officer of Gather. Here’s one of three pieces she’s written to mark International Women’s Day 2022.
Today, women have more financial freedom than ever. Certainly, investing is playing a bigger role in women’s financial planning, with many taking the first steps to do so throughout the pandemic. Instead of leaving their savings in bank account which earns little to no interest, increasingly women are taking the leap and becoming financially empowered to make low-risk investments which can give them a good return annually.
A quick look back at the history books shows us that women haven’t always had many rights or ownership over their finances. In the recent past, the prospect of applying for a loan, owning a credit card, or even having a bank account signed in our own name, for example, would have been unheard of.
Despite the strides made to fight for the financial independence of women, the harsh reality is that there is a glaring gender wealth gap, which is underpinned by longstanding imbalances such as pay inequality in the workplace, a lack of diversity and inclusion in the finance sector and a narrowed access to the world of investment.
According to the Centre for Economics and Business Research estimates, by 2025 60% of Britain’s wealth will be in the hands of women. Yet numerous studies illustrate the severe investment gender gap. Research from Kantar shows just 10% of women hold a stocks and shares ISA compared to 17% of men. A similar study from YouGov has revealed even starker findings still, with over half of women never owning any investment products at all, with a perceived lack of knowledge and confidence holding them back.
So, why aren’t women investing, and how can we change the state of play?
Are women more risk-averse?
One mode of thought is that there are subtle yet significant differences in the way genders think about their finances – in turn, this affects their decision to enter the investment world.
For one, women are believed to be more risk averse. Because of the gender pay-gap, for example, women are often targeted more with ‘save’ messaging, rather than the encouragement to do more with their money. The perception that the investment world is a closed circle or an ‘old boys club’ will likely also play a part, while women may also feel scared off from investing due to volatility driven by the Covid-19 pandemic.
In short, these are all very real concerns that play into the great investment conundrum. Of course, individual risk appetites and financial outlooks will vary. However, in general, research from HSBC has found that women are more likely to worry about their finances, less likely to consider themselves as financially knowledgeable or take responsibility for household financial decisions.
True or not, this means that the way different genders feel about money can have a marked impact on their decision to invest.
At Gather, we believe that solving this problem comes down to recognising, and ultimately breaking, the barriers that stop women from investing.
Naturally, we are all motivated by different things – this means that some individuals will be keen to minimise their losses, while preserving the value of what they already have. Likewise, the investment world can be complicated and jargon-heavy, so other investors might benefit from an extra helping hand when it comes to making decisions about their wealth.
Long term investing is the way
That’s why we are launching a wide range of unique opportunities to suit a variety of different investment tastes. Using our social platform, Gatherers can connect with friends, family and Gather’s experts – to share ideas for financial success. We make it easy to look up Financial and Industry Experts’ profiles, read their insights and find out where they’re making money. Access to this information should help give those women, previously held back by their perceived lack of knowledge, the confidence to invest.
At Gather, we want to help everybody make money with passion, irrespective of their background or gender. We genuinely believe that everyone can benefit from investing in their financial future.
Capital at risk.
The information provided by the blog are the opinions of the writer. As such, it should not be construed as investment advice.