Women are more conscious of investing responsibly than men, research from YouGov has found, with over 80% of females indicating this is important factor for their portfolios
The research, commissioned by Canaccord Genuity Wealth Management (CGWM) and published ahead of International Women’s Day (IWD) on 8 March, explored the propensity of women to invest and their investment behaviours, discovering that women lag men in their overall financial provisions.
Just under a quarter of high net worth (HNW) women surveyed have no investment portfolio (24%) and the same percentage have no pension (24%), compared to 14% of HNW men with no portfolio and 18% with no pension.
However, women are more concerned about investing in ‘responsible’ companies – those with good reputations for being environmentally conscientious and socially aware, the research said. Over 80% of women think this is important, compared to 72% of men surveyed.
Furthermore, almost a quarter of men (24%) think it’s unimportant and only 11% of men proactively seek out companies that tick the ESG box, compared to 18% of women.
It also found men tend to be motivated by companies focused on shareholder return and apply no restrictions on the companies they invest in (34%), compared to 14% of women.
Duncan Stratford, head of UK front office at CGWM, said: “Unfortunately women are behind the curve in investing – and pensions – although our figures show an increase in the number of women surveyed investing since last year (35% didn’t have a portfolio in 2018). But although they are less likely to invest than men, the women that do are more progressive investors – ESG investing is important for almost one in five women compared to one in ten men. Perhaps men still think you have to sacrifice returns if you want to benefit the planet, but as performance data shows, this is not the case. ESG is not a fad – it is a credible investment choice and female investors have a sense of that.”
Despite fewer females investing, more wealthy women are worried about retirement than their male counterparts – a third of men surveyed said they have no particular worries about retiring, compared to a fifth of women.
Talking about why they do not invest, a third of these females said it was because their money was tied up in property. 91% of HNW women said they owned property and almost half of women (43%) picked property as an asset class that is most likely to give them a decent return.
David Goodfellow, head of wealth planning at CGWM, added: “Once again our research shows women lag behind in financial matters. Where household finances are concerned, 80% of men surveyed are ‘very involved’ compared to just two thirds of women (66%). The fact that 24% of HNW women have no pension is alarming, although this has decreased from 30% last year.
“Women need to be made aware of the tax benefits of pensions and the fact that they provide a steady income in retirement – given so many HNW women are worried about funding later life care setting up a pension should be top of their agenda.”
Mandy Kirby, chief strategist and co-founder of City Hive, the network driving diversity in the UK asset management industry, said firms need to reposition how they communicate with women to encourage more investment: “Women are caring and pragmatic – they want to see a positive impacts but also healthy financial returns. Perhaps the way to interpret the data is that there should be a better quality of investment available that would attract more women to invest. Property offers more tangible security so it’s reasonable that women would look for companies that offer better long-term performance because they have a more sustainable outlook.
“With a 40% gender pension gap, the industry is not serving women and should be considering how it listens to the needs of women and communicates to them. We will be launching a study with Research in Finance that will look at creation and marketing of products and how it can help shrink this gap.”
