Female Investing; how to get ahead and stay ahead

WoTW sponsored by St. James’s Place / Morrisons Wealth - speakers Hannah Findley and Alexandra Loydon

Women on the Wharf kicked off January with our first event at The Parlour, Canary Wharf with a lunch and learn session, sponsored by Morrison Wealth and St James’s Place. The event was learning of the investing gap between men and women and what we can do to reduce and improve this. Alexandra Loydon from St James Place gave us all some great practical tips including looking to find a financial advisor sooner, rather than later and one that can support where you currently are. We learnt that we all have a misconception that a financial advisor is just for the wealthy, but Alexandra spoke to us about that not being the case, that everyone needs a financial advisor, as we simply can't know everything financially! ?

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Understanding the Female Investment Gap: Factors and Impact?

In just the UK alone, 29% reported trading stocks and shares online, compared to 47% of men.

This picture is similar across the world. According to a survey by NerdWallet, 48% of women currently have money sitting in investments within the stock market, compared to 66% of men.

This can be explained by the fact that women do not view investing as a financial priority. A YouGov survey tells us that 62% of men deem investing a high priority, versus 55% of women.

Gender disparity in financial literacy starts early, with societal expectations influencing how boys and girls are taught about money. While progress is being made, a significant gap remains, affecting women's confidence and independence in financial decision-making.

Lower average salaries, career breaks, and a general disengagement with finances further compound the issue. The investment industry's historical neglect of women exacerbates the challenge, leaving them with fewer incentives and opportunities to invest. Women often opt for lower-risk investments over shorter periods, impacting? the long-term growth potential of their portfolios. Moreover, the necessity to fund longer retirements adds another layer of complexity to their financial planning.

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Strategies to Bridge the Gap: Empowering Women in Finance

BNY Mellon revealed that only one in 10 women globally felt they fully understood investing.

The same study showed that 28% of women felt confident about investing their money.?

It’s therefore no surprise that 45% of women viewed the stock market as too risky for them.

Whilst women are not as frequent investors than their male peers, research shows that when they do, they outperform them.

Addressing the female investment gap requires a concerted effort from both the financial services industry and female consumers. Initiatives to encourage more women to enter the financial services industry as advisers and influencers were discussed. Language plays a crucial role, and there's a collective call to make financial concepts more accessible and encourage open conversations. Treating and guiding our daughters in financial matters with the same seriousness as our sons emerged as a fundamental strategy.

Understanding the basics of investing was emphasised, with questions raised about the audience's knowledge of their pension investments and preferred asset classes. The power of compounding, risk mitigation strategies, and navigating bull and bear markets were topics highlighted for financial education. Specific efforts by companies like SJP were discussed, including female-focused initiatives, increasing the number of female advisers, and promoting financial education in schools.

Did you know it isn't until women hit 35 that the wealth gap significantly increases between men and women and by 43 it is.....% These years are key to women as many of us take time out to begin a family, but advice on what we can do to limit that investment gap is key. In 2020 the gender pensions gap stood at 35% between men and women, and looking longer term, saving sooner and making sure you understand the funds available to you are key, as an example if you are younger, you probably want to look into funds that have a higher equity to bond split. Hence, it being so important to understand investing isn't just stocks and shares but your pension also.?

New Tax Year Considerations: Overlooked Opportunities and Regulatory Changes

Warwick Business School revealed that female investors outperformed the FTSE 100, but also their male counterparts over three years. The men’s investments outperformed the FTSE 100 by 0.14%. Whereas the women’s investments outperformed the FTSE 100 by 1.94%, that’s 1.80% higher than the men. If this performance was replicated over 30 years, women would end up with a 25% bigger portfolio.?

This picture held true some years before. Despite men trading 45% more than women, the University of Berkeley revealed that men had a reduction in net returns of 2.65% per annum.

Attendees were also reminded to consider commonly overlooked tax considerations and deductions during the tax preparation process. The discussion delved into changes in tax laws and regulations, emphasising the importance of staying informed about potential implications.

Insights were shared on specific tax-saving opportunities and strategies for the new tax year - Topics included tax-advantaged products, deductions, and proactive planning to optimise tax outcomes.

We want to thank Alexandra and St James’s Place, and Hannah at Morrinson Wealth.??

For a limited time only, Morrinson Wealth are offering members of Women on the Wharf a free, personalised 1-2-1 advice session, specifically tailored to help you apply the knowledge from this session to your own personal financial scenario. Their advisers are committed to providing impartial advice and actionable insights to help you manage your finances better. Please be assured that this session is entirely free and non-committal, you're under no obligation to take any further action or services. Get in touch here to arrange some time today - [email protected]