Women’s Stock is Rising: Why Aren’t Their Portfolios?

January 7, 2021

When it comes to investing, women are underrepresented and underserved. Because they live longer than men, earn less and tend to be out of the workforce for a period of time to care for loved ones, it’s easy for women to fall behind in investing for the long term.

Consider the following insights:

  • As of 2020, women control more than $10 trillion of total U.S. household financial assets.1
  • By 2030, American women are expected to control an estimated $30 trillion in financial assets that baby boomers are projected to transfer.1
  • As of 2021, 40% of U.S. businesses are women- owned.2

Despite these professional advancements, women continue to fall behind men in the areas of financial and retirement planning. More men participate in their workplace retirement plan (61%) versus women (55%) despite women living longer than men. And, women’s average account balances are smaller ($62,000) compared to men ($98,000).3

The “investment gap” is a reality. While women have increased their investment power, we believe the investment market has been notoriously slow to meet their needs. Women advisors who help other women grow their wealth are few and far between. Services catered to the unique needs of female investors are scarce. But the demand is clear, and people are starting to take notice. We believe that before we see a true balancing of the scales, changes must happen in the way financial advice is delivered to women by addressing the following advancements:

1.  More than half of women are part of the workforce.

As of January 2021, 57% of women were working or looking for work. Before the pandemic, women’s participation in the labor force had not been this low since 1988.4

2. Retirement planning is not one-size-fit-all.

The reality is that female employees still earn less than their male counterparts. In 2021, women make 82 cents for every dollar a man makes. This gap has decreased by only 8 cents since 2015.5

Compounded over the course of a career, that can mean a big difference in the size of a 401(k). Women also tend to live longer than men and are more likely than men to take time out of the workforce to care for children. These factors mean that more conservative estimates may need to be factored into a woman’s retirement planning.

3. Women are becoming more entrepreneurial.

The increase in female business owners is great for the economy, but entrepreneurs are so busy reinvesting most of their cash in their businesses, they sometimes don’t save properly for retirement.

Not sufficiently funding retirement savings can be risky. With more and more female entrepreneurs starting their own businesses, the concern around women outliving their savings is amplified.

4. Women lack confidence about investing.

The majority of women worldwide (58%)6 defer long-term financial decisions to their spouses, which can put their future financial security at risk, so advice from a wealth advisor may be helpful in developing a long-term financial plan.

5. Women are interested in investment guidance.

Women take charge of day-to-day expense management but defer to others like a spouse for long-term financial decisions. Despite that fact, the top three financial needs they identified were retirement planning, long-term care and insurance.6

Consult with an advisor

At Mariner Wealth Advisors, we can help women and others navigate their financial futures. We offer 360° advice designed to last today and beyond.

Sources:

1 ”Women as the Next Wave of Growth in U.S. Wealth Management

2 ”Women-owned Businesses: Statistics 2021

3 ”2021 Financial Life Benefits Report

4 ”National Women’s Law Center February 2021 Fact Sheet

5 ”The State of the Gender Pay Gap in 2021

6 ”Women Put Financial Security at Risk

The information contained herein is not intended to be personal legal, investment or tax advice or a solicitation to buy or sell any security or engage in a particular investment strategy. Nothing herein should be relied upon as such. The views expressed are for commentary purposes only and do not take into account any individual personal, financial, or tax considerations. There is no guarantee that any claims made will come to pass.

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