To mark International Women’s Day, we thought we’d present some of the latest trends and statistics around women and investment, banking and finance.
The Missed Market
According to consultancy Oliver Wyman, women represent the largest underserved demographic when it comes to financial services, suggesting that there is an estimated $700bn opportunity for providers in meeting this gap. With women’s educational attainment and personal wealth rapidly growing worldwide, it’s clear that service offerings are going to need to pivot extensively towards a increasing focus on women at the center of marketing and client engagement strategies.
Interestingly, it appears that the very language used within wealth management and financial services marketing appears to be putting women off from investing. The Wisdom Council’s Yes She Can (2019) report concluded that the financial services industry is often (perhaps unwittingly) underlining perceptions of low confidence and risk-aversion among prospective female investors, and that a huge majority of those surveyed didn’t know that they were even enrolled in a pension.
It is now well-documented that female-led startups receive less funding on average than their male-run counterparts. Investment firm Female Founders Fund tracks startup funding in San Francisco’s Bay Area (aka ‘Silicon Valley’), and found in 2015 that a little as 8% of startups attracting funding of $3-$15 million were led by women, rising to 13% in the New York City metro area. There are a number of reasons why these trends appear to be deeply entrenched, however a dominating factor appears to be a strong network effect. Venture Capital is an overwhelmingly male-dominated industry, which can complicate the key aspects of communication, camaraderie and the degree of convincing that needs to take place in order to achieve a successful fundraise for a company.
Women’s potential to transform companies’ fortunes at the c-suite level is sadly ignored, yet has proved to be a boon to corporations which embrace female leadership at their core. A 2016 study by the Peterson Institute and EY showed that an increase in the share of women in top management positions within a firm from 0 to 30% was associated with 15% rise in profitability, a trend which was bolstered particularly by the introduction of generous paternity leave policies.
The evidence also suggests that when it comes to retirement, women are worse off on average, suggesting that current pension offerings are ill-suited to the realities facing women. Research from trade union UNISON suggests that women represent around 61% of pensioners above the state pension age threshold, yet two-thirds of pensioners living in poverty are women. This effect is supercharged by the findings of research by pensions company Scottish Widows which indicates that on average, a woman in her 20s will see a £100,000 shortfall in their final pension compared to a man by the time their drawdown starts. The study highlights lower median earnings and a lack of engagement with options as key drivers behind the sobering reality that a woman in her early 20s would need to work an average of 37 years longer to reach pension parity with a man, compounded by complicating factors such as childcare. The evidence again points to the need for policies to help minimise the disruption to female careers through life events such as having children, with the ultimate goal of facilitating a more substantial post-career pot.
Where Yielders Comes In
Here at Yielders, we have looked into our investor base and our research shows that female investors are firmly in the minority. This is ultimately something we want to change as a priority, in line with our ethos that our products should open access to real estate returns for everybody. If you need more information about our product, or don’t know where to start, one of the team would be more than happy to assist you with your query, so you can make an informed decision on your path to financial independence.*
*When investing with Yielders, your capital is at risk. Yielders does not provide financial advice with respect to investments.