'Finding a financial adviser or mentor who can meet women where they’re at is really important'
In the realm of personal finance, age and income have often dictated investment strategies. However, some financial experts are advocating for a gendered approach to investing, stressing that young women need to take a different and more serious approach compared to their male counterparts.
Zena Amundsen, a certified financial planner at Astra Financial, underscored the importance of considering gender when planning investments, especially for young women. Amundsen pointed out that women often face unique life and career events, such as caregiving responsibilities, which can lead to career plateaus.
“It’s generally women who are expected to take time off from work for childcare, or to care for an elderly parent,” said Amundsen. “With that comes an earlier career plateau and the gender pay gap, and with that pay gap comes lower contributions, as well as a lower likelihood of being able to max it out and have as much in our pockets during retirement.”
This is further compounded by the fact that women have a longer average lifespan, Amundsen said, which often extends by approximately five years beyond that of the average man. Consequently, a less substantial retirement fund can potentially lead to even more severe repercussions.
Kristine Beese, founder and CEO of Untangle Money, urged women to “get their money working harder” for them at an early stage. “Studies show that women are really good at saving, especially when compared to men,” said Beese. “But it’s really important to start investing as soon as possible in a way that prevents that money from deflating over time, but also still allows them to sleep at night.”
Ayesha Ofori, founder and CEO of Propelle and a former wealth advisor at Goldman Sachs, advise women to consider capital appreciation and income-yielding investments to support their retirement. She also recommended exploring alternative investments, such as real estate and private equity, which “tend to yield higher returns than more traditional investments.”
Ofori underlined the importance of finding the right balance between return and potential loss and suggested that women stick with high-quality investments on major stock indexes.
“No one should go after speculative investments,” Ofori said. “But it’s important to keep in mind that over a 10-year horizon, we don’t see a ton of loss in the S&P 500, so sticking with ‘financial flower bouquets’ like exchange-traded funds that contain assets from a bunch of these companies shouldn’t be a major source of concern.”
Confidence and risk aversion are common challenges for women in the investment arena. While Fidelity Investments' 2021 survey showed that women achieved slightly higher returns (0.4%) than men, a lack of confidence and financial literacy remains a hurdle.
Experts stressed the importance of women seeking advice and mentorship from financial planners to overcome these barriers. They encouraged women to ask questions and set financial goals, with an emphasis on prioritizing retirement savings.
“From the literature and my time as a stockbroker, I know that women aren’t always as goal-oriented about their money at the outset as men are because of the way we’re socialized to talk about money,” said Beese.
“Finding a financial adviser or mentor who can meet women where they’re at is really important,” Beese continued. “It’s often through having more nuanced conversations that we can encourage young women to set the financial goals that, statistically, are likely to be really important for their future wellbeing.”
Investing doesn't have to be a solitary endeavor, Ofori said. “Talking about money and investing is often seen as taboo...it can leave us feeling isolated and alone in our financial decision making.”
“Find your cheerleaders and get them to hold you accountable to trying to meet your financial goals,” Ofori added.
