Friday, January 10, 2014

Investing: What women investors want

 The following is taken from an interesting article posted by Anne Kates Smith on  Aug 19, 2013, at 3:11 AM here

Research shows that men and women do approach money and investing differently. A classic study by behavioral finance academics Terrance Odean and Brad Barber found that female investors traded less often than their male counterparts, thereby cutting costs -- and boosting average returns by nearly one percentage point per year. 

Economics professor Gary Charness, of the University of California at Santa Barbara, assembled data from a host of experiments to conclude that women are more risk-averse than men. Study participants were asked to choose how much of their experimental assets to allocate to a risky investment, with a payout at the end of the experiment based on what they’d earned. Given the choice, women invested less, keeping more for themselves. 

And yet, women also tend to squirrel away more money. The Vanguard Group found that more women than men participated in their retirement plans at work, and women earmarked 8 percent to 11 percent more of their paychecks for saving. All of this is significant because women are now the principal breadwinners in four out of 10 families with children younger than age 18, reports Pew Research (63 percent of such women are single and 37 percent out-earn their husbands). The financial-services industry is taking notice of gender differences, and so should you.

For women, finding an adviser who speaks their language is key. Presentations that focus on a portfolio’s return, investment style, market capitalization and performance compared with a benchmark tend to resonate with men. But women prefer a more personalized conversation that focuses on goals.

I have recommended sites that will I think help women in this area, another one is called  is Directions for Women The following is from their website:

Our strategy is two-fold:
  • Encourage and motivate women to get the education and guidance necessary to become financially confident decision-makers. This will be accomplished through speaking, press coverage, publications, and facilitation of women circles and events.
  • Help financial advisors improve and broaden their outreach to women prospects and clients by providing presentational tools, research, insights, and processes to speak to and advise women; and educate advisors about the unique circumstances and advisory needs of women.

Certified financial planner Eleanor Blayney sees it in her practice. “The husband says, ‘How am I doing?’ He wants an answer relative to an index, other funds, other clients. But the wife says, ‘What does this mean to my lifestyle? To my kid going to college? To our decision to take a vacation? To my retirement plan?’” 

For now, the conversation in most financial-services venues is decidedly male-centric. The industry has launched a number of initiatives to tweak communications with clients and recruit more women into the field -- which should help everyone in the family play to their strengths.

No comments:

Post a Comment