Manchester United sales talks in new phase after Elliott Investment meeting – The Guardian Pipa News

Women are not investing in the market at the same rate as men, and the reasons for this are more nuanced than lower earnings power.

Experts point to factors such as how women are perceived and treated by the investment community, among other barriers to this gender investment gap.

Investment disparity is huge: If women invested at the same rate as men, there would be at least $3.22 trillion in private assets under management, a report by BNY Mellon Investment Management found. The company’s global survey, conducted in 2021, included 8,000 men and women in 16 markets. BNY Mellon also interviewed 100 global asset managers with $60 trillion in assets under management.

According to the Transamerica Center for Retirement Studies, American women are less likely to invest in an employer-sponsored plan or brokerage account when it comes to saving for retirement. The 22nd Annual Employee Survey, released in November 2022, was conducted in the US by the Harris Poll between October 28 and December 10, 2021, among a nationally representative sample of 5,493 employees.

The result is that women, who live longer on average than men, are less likely to retire when they want to. Some 53% of women feel financially comfortable retiring on their target date, compared to 66% of men, according to a survey by BMO. The study, conducted by Ipsos from Jan. 16 to Feb. 12, surveyed a sample of 3,401 U.S. adults.

Women face a number of barriers when it comes to investing. One is that the investment industry doesn’t attract women to the same extent as men, the BNY Mellon study found.

According to the global survey, 1 in 10 women feel they don’t fully understand investing and only about 28% feel confident investing some of their money. In the US, about 41% of women feel confident.

Yet 86% of asset managers surveyed said they target a male client, the survey found.

In fact, according to the Bureau of Labor Statistics, most U.S. financial advisors are men — only 35% were women in 2022.

Then there is the high threshold of the disposable income that women think they need before they invest. On average, women around the world believe they need $4,092 a month before they would consider investing any of it, BNY Mellon found. In the US, on average, women think they need more than $6,000 a month — or just over $72,000 a year.

In addition, more than a quarter of the women surveyed described their financial health as poor or very poor, said Stephanie Pierce, CEO of Dreyfus, Mellon & Exchange-Traded Funds at BNY Mellon Investment Management.

“If women think they don’t have great financial health and they have this very high [disposable income] hurdle, that’s a barrier that will really stop people from entering the financial markets,” she said.

Finally, 45% of women surveyed by BNY Mellon said investing money in the stock market, whether through an individual security or a fund, is too risky.

However, a Morningstar survey found that the gender investment gap simply boils down to the fact that women statistically earn less than men. The company surveyed 907 US residents last year, including 437 women.

“Once you control for income, a lot of those gender differences and investment behavior disappear. So either they no longer become statistically significant or they’re practically insignificant,” explains Samantha Lamas, a behavior researcher at Morningstar.

In other words, when researchers compared the investment behavior of men and women by income class, they found that they saved and invested in the same way.

“The problem was that men were just a big part of that upper-income class,” Lamas said.

In fact, the gender pay gap has not changed much in the past 20 years. Women earned an average of 82 cents for every dollar men earned by 2022, according to a Pew Research Center analysis of the median hourly earnings of both full-time and part-time workers. In 2002, women earned 80% of what men earned.

Yet financial advisors still see women differently than men, Lamas said.

“Female investors have historically reported that advisors assume they have a low risk tolerance and are interested in sustainable funds as soon as they walk in,” she said. “That is a generalization that I think simplifies the situation. The truth is that it is much more nuanced.”

For example, Morningstar found that there was quite a bit of interest in ESG investing, or environmental, social and corporate governance investing, where gender and age weren’t really a factor.

However, BNY Mellon’s global survey found that more than half of women would invest, or more, if the impact of their investment was in line with their personal values. They would also invest if the investment fund had a clear goal or goal for good.

The company calculated that of the $3.22 trillion that would come to market if women invested as much as men, $1.87 trillion would flow to impact investments that benefit people and the environment.

To get more women to invest, a more inclusive financial community needs to be built, experts say.

“We need more female financial advisors. That’s one of the easiest ways to close the gap,” said Beata Kirr, co-head of investment strategies at Bernstein Private Wealth Management and host of the firm’s “Women & Wealth” podcast.

In fact, nearly three-quarters of asset managers in BNY Mellon’s global survey said they believe the investment industry could attract more female investors if the industry had more female fund managers.

Male advisors also need to understand that their own income and economic success could be harmed if they effectively ignore women, Kirr said. More women are getting rich, whether it’s through company formation, climbing the corporate ladder or an inheritance, she noted.

“One fact is very clear. Women outlive men,” Kirr said. The average life expectancy for women is 79 years, compared to 72 years for men, according to the Centers for Disease Control and Prevention.

In fact, according to McKinsey & Company, women are expected to own a large portion of the $30 trillion in financial assets held by baby boomers by 2030. The company’s 2020 report said it is “a potential wealth transfer of such magnitude as to approximate the annual GDP of the United States.”

Then there is the financial jargon that professionals often use. About 31% of female consumers in the BNY Mellon survey said overly complicated language, which can be unclear or confusing, discourages them from investing or investing more than they currently do.

“You think of language as risk/reward asymmetry, risk-adjusted returns, alpha generation, right? Relative outperformance, tracking error, diversification, downside protection. We use these words to describe very simple things in very complex ways,” said Pierce. “It’s not helpful, and it can put off people who don’t understand it, including women.”

The investment community should also provide more opportunities that interest women, she added, noting the findings of the global BNY Mellon survey that more than half of women are interested in impact investing.

“We believe part of the call to action is to provide solutions that address the needs of women who want a financial return and social impact with our money, or a socially responsible investment,” said Pierce.

To that end, BNY Mellon recently filed to launch the BNY Mellon Women’s Empowerment ETF, which will invest in companies that demonstrate gender equality practices and/or offer products that support women’s everyday needs.

For the Morningstar Llamas, the solution to closing the gender investment disparity is to close the gender pay gap.

“That means we need these structural changes. To make an impact here, we need to get women paid more,” she said.