To get more women investing, a more inclusive financial community needs to be built, experts said.
“We need more women financial advisors. That is one of the easiest ways to close the gap,” said Beata Kirr, co-head of investment strategies at Bernstein Private Wealth Management and host of the firm’s “Women & Wealth” podcast.
In fact, nearly three-quarters of the asset managers in BNY Mellon’s global survey said they believe the investment industry would be able to attract more women investors if the industry had more female fund managers.
Male advisors also need to understand that their own income and economic success can be hurt if they effectively ignore women, Kirr said. More women are coming into wealth, whether it is through founding businesses, climbing the corporate ladder or an inheritance, she noted.
“One fact is very clear. Women outlive men,” Kirr said. The average life expectancy for women is 79 years, compared with 72 years for men, according to the Centers for Disease Control and Prevention.
In fact, by 2030, women are expected to control much of the $30 trillion in financial assets that baby boomers possess, according to McKinsey & Company. The firm’s 2020 report said it is “a potential wealth transfer of such magnitude that it approaches the annual GDP of the United States.”
Then there is the financial jargon that professionals tend to use. Some 31% of female consumers in the BNY Mellon survey said that overly complicated language, which can be unclear or confusing, dissuades them from investing or investing more than they currently do.
“You see language like asymmetrical risk/reward, risk-adjusted returns, alpha generation, right? Relative outperformance, tracking error, dispersion, downside protection. We use these words to describe really simple things in very complex ways,” Pierce said. “It’s not helpful, and it can put off people that don’t understand it, women included.”
The investment community should also be providing more opportunities that interest women, she added, pointing to the BNY Mellon global survey’s findings that more than half of the women are interested in impact investing.
“We do believe that a part of the call to action is to deliver solutions that meet the need for women who want to have a financial return and social impact with our money, or a socially responsible investment,” Pierce said.
To that end, BNY Mellon recently filed to launch the BNY Mellon Women’s Empowerment ETF, which will invest in companies that demonstrate gender equitable practices and/or offer products that support women’s day-to-day needs.
For Morningstar’s Lamas, the solution to eliminating the gender investing disparity is to close the gender pay gap.
“That means that we need these structural changes. To make an impact here, we need to get women to get paid more,” she said.
This content was originally published here.
