Historically, women have taken a back seat when it comes to managing their finances. In more traditional family structures, it has been men who have managed the family investable assets and been far more engaged with investing than women. And looking at the population at large, we know that women tend not to be as financially well off as men. According to data from the FCA, women typically have less investable wealth than men.
Savanta’s MillionaireVue research, which aims to understand behaviours and attitudes among British Millionaires, shows that there are also some other interesting facts specific to high net worth men and women. Men (60%) do still tend to be more likely to say they are the main household earner, compared to 52% of women. However, wealthy women are more likely to be entrepreneurs or working for themselves than their male counterparts.
Women are gradually becoming more involved and engaged with their own, and their families’, long-term financial lives. In conjunction with this shift, we do still see that men and women tend to think about and behave in disparate ways towards their investments. While men and women have a similar level of confidence in the economy overall, men and women have differing concerns and stressors when it comes to their finances and investments, and they prioritise things differently.
Living day to day and thinking further
Among JM Finn’s client base, there are interesting comparisons between male and female clients when it comes to their
main financial concerns. The main financial concern for both men and women is the performance of their portfolio. However a higher proportion of men (66%) name this as a concern compared to 51% of women. Women are also more likely to be concerned with having adequate financial protection.
Women’s financial concerns are also less intertwined with their investment portfolio, with women showing more concern towards more everyday financial matters. Men have stronger concerns around the impact of inflation on their investments (57% compared to 51%), while women are more concerned with the rising cost of living (39% compared to 33% of men).
A lack of confidence, or a dose of realism?
In addition to these concerns, women tend to rate their confidence surrounding financial matters lower than male counterparts. However, this doesn’t necessarily mean that they are lacking the skills or knowledge, only that they are more circumspect about investing than equally wealthy men. Women are also simply less likely than men to discuss topics like finances and investing with their peers. Less confidence in, and conversation about, investing than men has traditionally led many women to take a back seat in managing finances, and this has historically also translated to deferring to male partners when working with wealth managers and investment companies. This tends to show in our surveys in data suggesting women place a higher level of trust in their private banking provider or wealth manager. And this is also the case among JM Finn clients, where female clients tend to have even more trust and confidence in their investment managers.
It may indeed be that a woman’s lack of confidence in her own financial knowledge and aptitude leads to an increased
willingness to trust professional advisers and their specialist knowledge. However, this may be also a sign that some men overestimate their own knowledge and aptitude, misplacing their confidence in their own less trained investing skills. This approach towards investing and investment professionals may make women happier! In our data women tend to be more
satisfied with the returns on their portfolios compared to men. It’s possible their risk profiles tend to be lower and more suited to their long-term needs, or that their longer-term view of investments makes them more immune to the fluctuations of the market and its impact on their portfolios.
For the next generation
Among millionaires, women are more likely to transfer their wealth to their beneficiaries as part of succession planning: 21% of women have already transferred a portion of their wealth to beneficiaries, compared to only 12% of men. Men however are more likely to put succession plans in place, write wills and inform their beneficiaries. There is definite scope for more women to appreciate the value of financial planning around inheritance to ensure that their wishes are fulfilled.
Empowered to do more and question more
Increasingly women are leaning into their own and their families’ financial lives, and wealth managers are supporting and accommodating these changes. But wealth managers need to continue to support all their clients, ensuring they have access to sufficient resources to feel confident in their own understanding of their investments and their plans. Women
should feel empowered to engage with their finances and investments, ask questions and ensure that they feel supported by their wealth managers.
Savanta is a market research consultancy based in London. It has been described as one of the UK's "most respected" polling companies.
www.savanta.com
