There’s an uncomfortable truth at the heart of the investment and pensions industry. It remains a staid Old Boys’ Club. This is despite the best intentions of many wonderful male colleagues and peers I have and despite the fact that women will typically be more successful investors and manage the majority of British households’ general finances.
So why, in an era when women fight on the front line, compete in marathons, run households and dominate prime time television, are they falling at the last hurdle: the stock market?
Let’s back these generalisations up with some data from our latest survey. Fifty-one per cent of women have savings accounts, compared with 50pc of men; 40pc have cash Isas, compared with 41pc of men. So cash is queen as well as king.
But turn to the stock market and female engagement falls off a cliff. Just 10pc of women have a stocks and shares Isa (it’s 17pc of men), while only 7pc hold other investments or unit trusts, compared with 14pc of men. The ratio of male to female customers among the top 10 DIY investment platforms is 68 to 32.
It’s a similar story with private pensions, where just 11pc of women top up their (typically smaller) retirement funds, compared with 17pc of the chaps.
Why are women so turned off?
The four biggest factors we hear in our research are affordability, risk, trust and a feeling of not knowing where to start. I have long felt that risk is the wrong word to describe market volatility.
The word risk, in our day-to-day lives, suggests imprudent or silly behaviour. Society tries to deter us from taking risk from the time we start to crawl and pick things up. In a focus group we ran last week, Lorna, a 54-year-old administrator, summed up the popular view.
“Investing is just like gambling,” she said. “I’d rather keep my money in the bank even if I only get pennies back.” She, like three of our seven women profiled, was heavily exposed to property. Cash and property rule. Yet, over an 18-year period, the authoritative and long-running Barclays Equity Gilt Study tells us that the probability that shares will outperform cash is 99pc.
Savers’ behaviour over Junior Isas, is particularly telling about our skewed interpretation of “risk”. Thanks to an investment horizon that stretches far into the future, that vulnerable gurgling baby can stomach the rollercoaster of emerging markets in a way that a middle-aged adult cannot.
Yet women are three times more likely to open a cash Junior Isa than a stocks and shares Junior Isa. Treasury data confirms that 73pc of Junior Isa subscriptions goes into … yes, cash. With interest rates at historic lows, does this parking of long-term savings in cash not amount to an epidemic of “reckless caution” that will have disastrous long-term consequences?