A new report from the fintech firm explores what needs to be done to get more women investing.
Despite being better than men at investing, according to multiple studies, many women still lack the confidence to invest.
That’s the key finding from a new report by financial news and planning app Finimize. Based on research encompassing 300 women from the firm’s 250,000 strong subscriber base, Finimize found that a lack of knowledge is the single biggest barrier to women investing.
39.6 per cent of women cited a lack of knowledge as the biggest barrier to investment, with fear of losing money (18.3 per cent), preferring to build up savings (15.7 per cent) and trust (9.6 per cent) the next biggest factors.
The women Finimize spoke to weren’t willing to invest their hard-earned cash through channels they didn’t understand. Its report emphasised the need for continued education but also for a shift in tone. Jargon and condescension were noted as things to avoid.
Women who had already begun investing were asked for tips on what helped them to get started. 38.1 per cent cited 'education content on how to start investing' as the key enabler. Other methods included building up enough savings to feel comfortable investing, learning from others in a community, and relying on clear information from providers.
When they do invest, 55 per cent of women do so with financial independence as their primary goal. The next most popular choice was early retirement, with a mere 15 per cent of the vote. Finimize sees an issue here, in that the financial advice industry often focuses on ‘monolithic’ goals, such as buying a house.
The majority of women (64 per cent) prefer to be involved in managing their investments, while 21 per cent are content to defer to an advisor – whether automated or human. It’s an interesting data point for the rapidly growing robo-advice industry, which is almost wholly reliant on automated, passive investment strategies. It's also something to consider for the larger peer-to-peer lending platforms, which are en masse trending towards automatically diversified lending products.
A point which all investment firms ought to bear in mind is that ethics turned out, by a narrow margin, to be the single most important factor for women when selecting an investment provider. Other popular choices included low fees and past performance.
Finimize launched the report at an event at female co-working space Blooming Founders last week, with 200 women in attendance.
Speaking at the event, Sarah Pennells, founder of SavvyWoman.co.uk, said: “Describing female investors as ’too cautious’ is lazy. Women make great investors when they do invest, and those who don’t are often put off by complex and unclear language and an industry that, frankly, hasn’t thought of them as customers until fairly recently.”
Passion Capital partner Eileen Burbidge said that ‘transparency about ethos and principles from new entrants’ can help to bring the barriers to investing down.
You can download the full report here.
Join AltFi at their fourth annual Australasia Summit to examine the future of lending in Australia. Where we present best practices across, technology, partnerships, open banking, governance, data access, consumer experience, capital markets & funding, the role of government and regulation.