DOUBLE THE AMOUNT OF WOMEN COMPARED TO MEN ARE INTERESTED IN INVESTING IN ALTERNATIVE FINANCE PRODUCTS

Factors likely to include alternative finance firms often having a stronger purpose and cooler brands

that appeal in particular to younger generations of women

Findings are in contrast to a fear of failure among women and their overall more risk-averse approach to investment which has resulted in a £15bn gender investment gap

BLEND Network calls for creation of supportive networks, a better balanced wealth management sector and plans to host a series of webinars to help better educate women around investment

London, 12 November 2019 – Double the amount of women compared to men are interested in investing in alternative finance products. Factors cited include alternative finance firms often having a stronger purpose and cooler brands that appeal in particular to younger generations of women. This is in contrast to women’s overall more conservative and risk-averse approach to investment, which has resulted in a £15bn gender investment gap.

These are the key findings of research carried out by BLEND Network, based on a survey of close to 1,000 people over the past two months. As the survey results show, there is still a significant gap between men and women’s investment attitudes, both in terms of holding an investment product and in the willingness to take risk.

Key findings

· Women are more interested in exploring alternative finance options (29% of women compared to 15% of men)

· Some 50% of male respondents either currently hold or have held in the past an investment product compared to 31% of women.

· Women hold more bonds (14% to 9%) with the numbers similar in terms of unit trusts (both 18%) and commercial property (3% for women compared to 4% for men)

· When investing, 43% of men listed returns as their number one priority compared to 27% of women. 32% of women listed safety as their number one priority compared to 22% of men.

· In terms of investment products men held more: shares (77% compared to 63%), ETF’s (17% compared to 7%), Investment Trusts (26% compared to 15%) and P2P lending (11% to 6%).

According to the survey, women are more interested than men in investigating alternative finance options. The main drivers behind this are likely to be that many alternative finance brands have a wider social purpose as part of their ethos, which appeals more to women, in particular younger generations, while many of these businesses also have more on trend captivating brands, which again are likely to appeal to a younger cohort of women.

However, lack of knowledge, confidence and fear of failure among women when evaluating their investment options remain major hurdles. Also, according to the survey, even in this current low interest environment, women are also much more likely to opt for safety rather than returns, with women listing safety as their number one investment priority.

As a result of this more cautious attitude, a study from market research firm Kantar TNS discovered about £14.3bn in investments was held by women, while £29.3bn was held by men. Yet women are better investors than men in the long term. A recent study by Warwick Business School has shown that women outperformed men by an average of 1.8 per cent over a three-year period. The report highlights the greater patience women have with ultimately means that women benefit from buy and hold investing, meaning that they don’t build up trading costs, don’t get distracted by short-term market movements and, as a result, aren’t tempted to sell at the bottom of the market and buy at the top.

Given this BLEND Network is calling for a range of initiatives:

Creation of supportive networks: Women should not pursue this change alone but should network to create supportive communities in which they feel free to share information, experience and advice.

Better education and a more supportive wealth sector: Women should educate themselves to better understand financial management. We will be hosting a series of seminars on this area from next year and will likely co-host some with one of our new corporate partners, The Curtain, a private members club for finance and creative professionals with an interest in growth companies . Greater knowledge will allow women to build their own confidence and the wealth sector should reform itself to be more supportive of women and have greater female representation in their ranks.

Embrace the difference: A woman’s more risk-averse nature should be embraced. Female investment priorities are different, not inferior. Investing does not have to be full of risk to be successful and if women understand that their individuality is an asset, it will help encourage them to invest.

Do not be afraid to start small: You don’t need to be rick to be an investor. Women can start with the smallest amounts and build up their confidence.

Celebrate female success: To do this and tackle an “old boys club” perception, it is important to change the composition of the financial services industry as currently only 10 per cent of wealth advisors are women. Their positive stories will encourage other women to work in the industry.

Follow female money bloggers: You are not alone and somebody has been in your situation before. There has been an enormous rise in the number of women who are currently blogging personal money diaries. Follow them, try to learn from their experiences and benefit from their advice.

Roxana Mohammadian-Molina, Chief Strategy Officer, BLEND Network, comments:

“Our survey clearly shows that women have a greater appetite for alternative finance products than men, partly because of the way they are marketed, which suggests that if investment products were offered in ways that were more sympathetic to women or more tailored to their perspectives and attitudes then this could help significantly in closing the investment gender gap.

“A greater appreciation of female investors’ needs and their investment priorities and a more supportive wealth management industry would help to drive change, but women can’t and shouldn’t wait for this change to happen but should act now to drive it forward themselves.”