New research confirms women are cautious about investments

By Wendy Cuthbert | Mid-November 2010

Women are more cautious investors than men and they seek financial advisors who understand their situations. These are among the findings of two recent surveys that confirm that a gap exists between the way men and women regard investing.

The surveys, one by BlackRock Asset Management Canada Ltd. — for its iShares Canada division — and the other by Franklin Templeton Investments Corp., both of Toronto, reveal some of the prevailing attitudes held by Canadian women concerning investing, retirement and financial advice.

The findings of these surveys may come as no surprise to many advisors. But the fact that they were released less than a week apart hints at an increasing interest in the gender gap when it comes to investment attitudes and practices and the need for financial advisors and financial institutions to do more to meet the needs of female clients.

Says Mary Anne Wiley, managing director and head of distribution for iShares: “Women are a growing force in the industry as investors, and it’s important for us to understand our clients and their needs.”

MORE CAUTIOUS

The iShares survey revealed two main points, according to Wiley. The first is that women tend to be more cautious investors than men. Less than one in 10 women surveyed described themselves as “aggressive” when it comes to investing, compared with 21% of male investors. Both genders, however, admitted that they have become more cautious over the past two years.

Women also expect more from their investment portfolios. While a majority, 70%, named “preservation of assets” as an essential investment priority, vs 57% of men, almost half of the women (47%) said it was “very important” that their investments grow (compared with 38% of men). And 44% of women picked the generation of income as “very important” (vs 36% of men).

Women are clearly interested in all three factors, Wiley says, making it important that they work with financial advisors. And that brings up the third finding: women prefer the human touch when seeking investment advice.

Women came out slightly ahead in terms of reliance on information from people: 48% of women surveyed got their information from banks and other financial institutions, vs 43% of men; 18% of women referred to fund managers (vs 17% of men); and 32% of women got info from friends and family (vs 28% of men).

And while 61% of men turn to daily newspapers for their financial information, only 49% of women take that approach. Says Wiley: “Female investors really value what [advisors] are bringing to the table.”