Mind the gap: Bridging the gender investment divide
Property investment platform Brickowner has reviewed data to establish the main reasons creating the gender investment gap within the U.K. and identify solutions that can help overcome the investment gender divide.
Commenting on the findings Brickowner CEO Fred Bristol said, ‘It is unacceptable that in this day and age, woman fall behind men when it comes to investing for their future. We have been looking at the data, to help understand us why this is happening and how we can overcome these problems as we develop our platform.’
The research highlights, how the disruptive nature of technology can produce financial products more suited towards woman, Fred commented ‘The good news is that with the application of technology some of these industry problems can be overcome. Online investment can offer more control and flexibility over investments without paying middlemen or having to in some cases endure aggressive sales tactics.’
Here are Brickowners’ findings:
In the passing of International Womens’ Day and in the wake of the #TimesUp and #MeToo movements the gender differences across almost every area of our lives is being pulled in to focus, shining a light on areas that if changed could make this world a fairer place.
Within this movement, one area that remains opaque is why woman
invest and in turn, benefit from investment less than men?
With 17% of investors in property investment platform Brickowner being male, the company set out to review the data out there and establish the four main reasons that could be contributing to this issue.
1. Unequal Pay/Disposable income
Women invest less than men in the UK The first and most apparent reason stopping woman from investing as much as men is the pay gap between genders.
‘the gender pay gap stands at 18.4% in favour of men’
Last year a report by Money Farm stated that half of the women without financial investments in Britain cite a lack of funds as
the most common barrier to investing
The absence of disposable income at the end of the month makes it unlikely that woman can invest.
2. Unequal Pension pots
The natural follow-on effect of lower pay amongst woman is lower pension pots. The introduction of auto-enrolment has pushed 3.5 million more women in to workplace pension schemes, an increase of 70%, with 8.7 million now participating; however, women are still reaching retirement with significantly less in their pot than men for a number of factors such as, lower average incomes and the unequal burden of care responsibilities for both children and elderly relatives
‘an average woman’s workplace pension having £53,000 in it compared to £120,000 for men’
Over the course of a lifetime, taking in account that investment go up means that gender variations in total lifetime earnings remain substantial, with men earning — on average — 80% more than women.
This in part might be attributed to women who have children but take no career break still face a motherhood pay hit.
Research for the Pensions Policy Institute found that when compared to men, there is a gap of £7 a week, or £364 a year, for the average earning woman with two children, even if she takes no break from full-time work.
All of these factors result in an average woman’s workplace pension having £53,000 in it compared to £120,000 for men, according to research from Close Brothers Asset Management and the Pension and Life Savings Association.
3. Many financial services firms miss the target when appealing to woman
As women have entered the workplace and earn their own money many industries have stepped up to the challenge of selling to female consumers. It is hard to think of any consumer based products that do not now have gender-specific versions at a cater
to this market except when it comes to the financial services industry.
One of the biggest studies carried out in recent years by Kantar on over 30,000 woman found the perception of banks advertising fails to consistently communicate qualities including ‘understanding’ , ‘dependability’ and ‘accessibility’ to women using facial recognition technology.
4. Women are less trusting of investment firms
One area where the hangover from the 2008 financial crisis still lingers is in the level of trust that we can place in our financial institutions.
All investments require the investor to weigh up the level of risk vs reward. Without a doubt, this is the crux of what investment is.
Risk can be balanced by the amount of trust one places in the scheme and individuals that they are investing with.
‘Women keep on average 71% of their savings in cash’
Traditional investments have, over the decades repeatedly failed to do this with woman. Women keep on average 71% of their
savings in cash, according to a survey by BlackRock, which goes some way to highlights a general lack of trust when it comes to investment.
With men, this figure drops to 60%. The higher the risk, the less woman invest shown to the most significantly in investments like Bitcoin where 96% of investors are male
Although progress feels slow on the first two issues, it is being made.
None-the-less research from the Pensions Policy Institute found that 76% of women aged over 60 are single, widowed or divorced meaning they will have to support themselves and the fact that they will live longer than men only intensifies the need for woman to start investing now.
Evidence suggests that women would make great investors following a buy and hold approach based on loyalty.
Also, it appears that woman are more prepared to consider an alternative platforms when investing, possibly as a result of new ways in which they are being engaged giving some insight into addressing point 3 and 4?
It also makes good business sense and creates a massive opportunity for the right companies to cater to a new potential market (potentially worth £130bn).
In the past Tech has challenged convention, given changes happening within financial services that in the past have been closed for no good reason.
Click the link to visit Brickowner
Launched in 2017 Brickowner is a property investment platform that allows people to invest small sums of up to £100 into high return property investments that in the past had prohibitively large minimum investments.
Brickowner partners with property managers whose experience and track record provides better, more secure investments across a broader range of property sectors that in the past have been unavailable to smaller investors.