According to Fidelity’s 2022 Money Moves Study, not only are more women investing these days, but they are starting younger. This new generation of women between the ages of 18-35 are creating brokerage accounts much earlier, at an average age of 21, compared to the average age of 30 from just one generation ago. This is a staggering 9 years earlier.
This is good news. Time and again, studies have shown that starting young is the key to growing your investments and building wealth. The more time you give your investments to compound, the greater they will become. This works especially well if you funnel in a small amount each month to add to your existing funds. Over time, it can easily add up.
Fidelity’s Head of Women Investors, Lorna Kapusta, offers an example: a comparison between a person who starts investing at age 25 versus another who starts investing at age 40. If they both contribute $50 a month, by age 67, the person who started earlier will have accumulated approximately $144,000 while the other will have just $46,000.
To put this into perspective, the person who started early would have made five times their initial investment, while the one who started later would only have doubled theirs. Provided that sufficient research is done prior to opening a brokerage account, many will be able to slowly but surely build up their wealth.
This increased involvement women have in managing their personal finances also signifies a turning point in the 21st century. Barriers to investing are gradually being eliminated, no doubt, by the increased accessibility of investment tools, platforms, and guides. With this, women’s hesitation in investing have also been melting away.
Finally, credit must be given to positive changes on large scales, such as in individual workplaces and in the financial world at large.
Within the workplace, employers are automatically enrolling employees into retirement plans, which can be seen as a form of investing as well.
In the same report from Fidelity, a similar trend can be seen with the age at which women are opening retirement accounts – they are getting younger and younger. For women over 36, the average age they opened an account was 27. With this generation of women between 18-35, the average age they are opening accounts is 20.
Female investors are also gaining momentum because of the encouragement they receive from the financial sector, particularly, from international banks and brokerages. In the past decade, many large and renowned banks and brokerages have set up outreach and referral programmes to help women become professional and retail traders.
For example, JP Morgan’s Winning Woman Program aims to launch young women’s careers in the financial services by helping them develop skills in areas such as marketing, sales, and of course, professional trading. Similar training programmes are offered by JP Morgan’s contemporaries, such as Goldman Sachs, Bank of America, and Citibank.
Aside from calling for an increase in female representation in the professional investment world, banks are also setting up referral programs for their female clients. Saxo Markets’ Close the Gap campaign targets women looking to start investing in their spare time. With the goal to close the gender gap by onboarding more female retail investors and guiding them in trading, Saxo’s existing female clients can earn up to 750 SGD per referral and unlock additional perks such as spa treatments and shopping vouchers.
With large banks not only noticing the stark gender gap in finance but also actively pushing for change, the investment world is becoming more inclusive and welcoming for young women who want to participate. In fact, studies have shown that young female investors who lack knowledge about financial planning are very likely to speak up and ask for help, with only 29% stating that they would feel too intimidated to do so.
Young women are on the right track when it comes to financial planning, and we are witnessing this changing tide. With time, not only can female investors build a more secure and stable financial future for themselves, but they can also inspire and mobilise future generations to keep the torch burning.
The financial well-being of women depends on closing the gender investment gap. Women typically save more and live longer, yet they tend to earn and invest less when compared to men. On International Women’s Day, the question remains, what is the status of women in finance?
Banks in Singapore and the surrounding areas have taken great strides in closing the investment gap in recent years. From bridging the gender pay gap for equal tasks performed to referral programs that make investments more attractive to females.
A study done in 2018 by the Ministry of Manpower and the National University of Singapore concluded that although there has been a positive move in the right direction, males still dominated senior roles. This spurred the adjustment by Citi Singapore to take more significant steps toward bridging the pay gap between male and female staff.
In January 2020, they reported that female employees earned 99 percent compared to their male peers. Various factors were considered during the bank’s global pay equity review. Salary adjustments were made considering key points such as job rank and function, geography and base salary and bonuses.
Jorge Osorio confirmed to Business Times that Citi’s global goals include having at least 40% females in senior roles. While the numbers have steadily increased year on year, he stated that they would need to do more to reach their ultimate goal of closing that gap.
Saxo Markets has also joined the fight towards closing the gender gap. In July 2021, the investment specialist launched a new referral programme called ‘Close the Gender Gap’. This programme motivates women to take ownership of their financial freedom and start investing.
According to the 2021 World Economic Forum report, it will take another 267 years to close the ‘Economic Participation and Opportunity’ gender gap to 100% from its current 58%. The report noted only a marginal improvement since the 2020 report was released.
Maria Jelen from Saxo Markets believes that they have the power to systematically close the gap by giving women the tools, knowledge, and confidence to make informed investment decisions. Closing the wage gap needs to be a collective effort between individuals and industry.
Jelen stated that Saxo saw a global increase of 354% in new female investors compared to 288% for males in 2020. Singapore saw a similar boost in new female clients of 410% for the year.
With the ‘Close the Gender Gap’ referral programme, existing female investors can earn up to SGD 750 by simply referring a female friend. Furthermore, they stand to earn extra bonuses like books, spa treatments, shopping vouchers and visits to attractions.
According to Saxo’s data, over 70% of their clients are male, which leaves much room for growth. Suzy Han Shiqi, the Deputy Head of Digital Sales from Saxo Markets Singapore, believes that women can solve the investment gap themselves by taking control of their financial futures.
Thanks to DBS’ time-hallowed dedication to gender equality in their workplace, they have once again been added to the Bloomberg Gender-Equality Index (GEI) for the fifth consecutive year. The threshold for the 2022 GEI was higher than previous years, and companies had to score at or above the Global threshold to be included.
The GEI looks at tracking the performance of public companies that are transparent in gender-data reporting. Companies are measured against the following five pillars: female leadership and talent pipeline, equal pay and gender pay parity, pro-women brands, inclusive culture, and anti-sexual harassment policies.
DBS sets an example in the industry, with 50% of its workforce comprised of females and 40% of the senior management. They continuously work towards building an inclusive work environment apparent in their GEI inclusion.
A study done by Warwick business school studied 2,800 male and female investors over three years. They found that the women outperformed the FTSE 100 and received better returns than their male peers. So how can women take charge of their financial futures?
Firstly, according to Tan Siew Lee, OCBC’s Head of Wealth Management, women should take charge of their economic planning. Considering that women have a higher life expectancy, it makes sense that they should plan for their financial futures.
Here are some pointers from Ms. Tan on how women can achieve this:
- Become aware of what’s going on in your finances and make sure to put something aside for unplanned expenses.
- Be clear about what type of lifestyle you want and what it would take to get there.
- Make a habit of tracking your expenses.
- Invest available savings rather than keeping them in a deposit account.