In the research for a webinar I hosted in July for Nasdaq, I found some shocking facts about female investors. Women now control 51% or $14 trillion of national wealth, yet they lack the confidence and knowledge to invest it fearlessly. As women continue to gain more financial power, it’s critical that women take control of their financial future. To quote an influential White Paper from Pershing in 2013, “women are not a niche market.” They are an important group, and growing, and going to grow even more.
Fact 1: Women Lack Investing Confidence
One of the most shocking facts I found in my research was that 72% of women don’t feel confident about selecting financial investments on their own. In the same study, 63% of women don’t feel knowledgeable that they can plan for their retirement. While these statistics on their own are alarming, they present a challenge: what will make more women confident investors? According to a recent LPL study, one of the biggest problems women have is a lack of understanding of financial jargon. 57% of women surveyed felt that financial terminology was confusing and made it more difficult to make decisions. Women want clear, simple explanations of their financial choices. Greater knowledge about investing, explained in a clear, straight-forward way is what can help women, and any investor, make more confident financial decisions.
Fact 2: They Don’t Feel in Control of Their Finances
In BlackRock’s 2014 Investor Pulse survey, only 38% of women described themselves as “in control” of their financial future, compared with 55% of men. When it comes to investing and financial planning, many women feel like they are left out of the conversation. Studies show that women don’t feel as confident and comfortable talking about finances as men. This also goes back to the problem of a lack of confidence and knowledge.
Fact 3: They’re Concerned about Retirement & Financial Future
Are women interested in their finances? Of course they are. More women than men cite concern about their financial future; 60% of women say they worry about not having enough money to last through their retirement. In some ways, financial planning is a bigger concern for women, because they statistically live longer than men. Nine in ten women are expected to be the sole financial decision maker at some point in their lives, due to longer life expectancy, higher divorce rate, and higher salary equality. Thus, it makes sense that women are so concerned about their financial future.
Fact 4: Women Want More Information and Involvement
In addition to being concerned about their financial future and their retirement, women actively seek more involvement. According to a study by Fidelity, 62% say they would like more knowledge so they can make smarter financial decisions. They can do this by investing in stocks, which have a higher return historically than cash or mutual funds, yet almost two thirds of all savings and investments are held in cash, which have a minimal to 0% return.
Fact 5: Their Investments Perform just as Well, Sometimes Better, than Men’s
Despite lack of confidence, not feeling in control of finances, and their fears regarding retirement, women’s investments actually outperform men’s by 1% annually (which has been credited to overtrading by men). That’s pretty impressive for a demographic of which only 28% feel confident in making investing decisions. Another interesting statistic: men save 7.9% of their salaries, while women save 8.3%, meaning that women on average have more investable assets for their retirement.
Women must face the challenges of lack of confidence, lack of knowledge, not feeling in control, and concerns about their retirement. Given that 9 out of 10 women will be the sole decision-maker at some point in their lives, it’s critical they arm themselves with the knowledge and confidence to take control of their financial future. And, with the right set of tools and information, they can.
Click here to register for one of Sandy's upcoming “Novice to Knowledgeable” webinars on how to build a killer portfolio and invest with confidence. The article “5 Shocking Facts about Female Investors” originally appeared on Sandy’s byline page on Nasdaq.com.
Sandy Chaikin is a member of the DailyWorth Connect program. Read more about the program here.