Survey finds many men and women think men are the better investors; they’re not
Many men and women think men are the better investors. They’re wrong.
After checking how 8 million of its customers did during 2016, Fidelity Investments found that women did better than men by an average of 0.4 percentage points.
The difference in performance is small, and it’s always dangerous to make big generalizations out of small slices of data. But it slots in with other research that suggests women tend to take a longerterm view of investing. They are more likely to buy and hold their investments, and they take fewer risks, for example.
“When women actually take the step of investing, they do a good job,” says Kathleen Murphy, president of personal invest- ing at Fidelity. “It doesn’t surprise us, but I think it will surprise them. The issue is: How do we get women to have the confidence in themselves to take care of something that is fundamental to their future well-being?”
To check confidence levels, Fidelity asked pollsters to survey about 1,000 investors early this year and ask whether they thought men or women had the better returns in 2016.
Men and women answered roughly the same way. Nearly half of each group thought there would be no difference (49 percent of men and 47 percent of women). But among those who guessed that one gender would come out on top, the vast majority said it would be men. Only 9 percent of women (and 9 percent of men) said they thought women earned higher returns in 2016.
One of the main reasons for the lack of confidence among women may be the financial services industry itself.
Less than 10 percent of all U.S. fund managers are women, and the percentage has been on a slow decline since 2008, according to a recent study by morningstar. Managers attribute much of that to the small percentage of women throughout the financial industry. When relatively few analysts are women, that leaves few potential fund managers.
To better engage with female customers, Fidelity now writes all its promotional materials with an imaginary, 38-yearold target customer in mind. She’s a woman, and her name is Susie.
“Everyone in the company knows Susie and says we need to walk in Susie’s high heels,” Murphy says. “Whether it’s financial planning or saving for retirement or retirement income, we pause and ask if this will meet Susie’s standards.”
Financial companies certainly have an incentive to engage more with women. Divorce rates are rising for older Americans— it’s roughly doubled since the 1990s for those aged 50 and above— which means more women are becoming a sole financial decision maker. And women continue to have longer life expectancies than men. In blunt market terms, that makes them a bigger pool of potential customers.
Fidelity says it already has seen improvements in recent years following its increased outreach to female customers, with more getting their portfolios in better balance. That means they’ve got an appropriate mix of stocks and bonds for their age, rather than being in all cash at a young age or in all stocks during retirement.