Fidelity reveals the barriers to women investing

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MEDIA RELEASE  With financial inequality continuing to be an issue for many Australian women, Fidelity International has released new research which reveals the barriers that exist for women when it comes to investing.

The research reveals that while women invest less than men, they are more worried about their financial future.  In fact, 42.2% of women worry about this on a daily or weekly basis, and more than half (52%) don’t think or don’t know if they are on track to achieve their financial goals.

When it comes to retirement, more than a third (35.6%) don’t know how much they need to retire.  Of those who do think they know, they estimate they will need around $460,000 less than men ($1.025m vs $1.488m), despite the fact that they are likely to live longer.

Alva Devoy, Managing Director at Fidelity International in Australia, comments: “Not enough women are investing in the stock market.  They are more risk averse, prefer the perceived safety of cash and feel that the investment industry is not tailored to them.

“Why does this matter?  Despite recent progress, women are still earning less, they take career breaks and there are fewer of them in senior positions which has resulted in a superannuation gap.

“If women’s ability to earn and then save during their working lives is less than men’s, then it’s more important than ever that they have access to the tools to make their money work hard for them.  A lack of time and confidence, and fears about the risks, are all obstacles that are stopping women from believing that investing is for them.”

The difference between investing in the stock market and cash over the long term is clear.  Someone who invested $10,000 in the ASX200 in January 2000 would have seen their savings grow to over $45,000* today. However, if they invested in cash, they would only have $21,780.

 

Top barriers to investing

Women cited a number of reasons why they don’t invest:

Feeling they do not have enough money

  • Half of women (50.5%) said that they didn’t have any spare money to invest (compared to 35.2% of men)
  • Perhaps this is because almost half (46.3%) believe they need a lot of money to invest in the stock market

 A high aversion to risk

  • Almost half of women (46.2%) say minimising risk is their priority when it comes to investing, compared to just over a quarter of men (26.8%)
  • More than double the number of women than men (33.8% vs 15.7%) describe their appetite for financial risk as ‘very low risk’

 Confidence in their financial knowledge

  • Less than a third of women (28.3%) describe themselves as ‘very’ or somewhat’ confident when it comes to investing, compared to 50.8% of men
  • 58.8% of women say they have the right level of information or knowledge about investments, compared to 73.5% of men

 Feeling that investing just isn’t for them

  • When asked about how they would describe investment communications, 52.6% of women say ‘complicated’, 25% say ‘intimidating’ and 20.8% say ‘tailored to men’
  • Half (49.4%) felt that they would be better putting their money into a typical savings account than investing it elsewhere

“One of the most interesting findings of the research was the way that women engage with their money,” Ms Devoy says.

“We found that women tend to focus more on goals rather than financial gain; having enough money to provide for their families, paying off their mortgage and having enough money for the lifestyle they want in retirement all ranked as top priorities.

“As an industry, if we can find a way to better engage with women, we can in turn help them to unlock their financial power.  That’s a change that will not just benefit women, but society and the economy as a whole.”