A spotlight on financial inclusion, working to #BreakTheBias

It’s International Women’s Day 2022,1 a chance to celebrate the social, economic, cultural, and political achievements of women. It is also an opportunity to analyse the need for change and key focuses in the fight for equality.

This year’s theme is about how we can #BreakTheBias and there is an emphasis on the inequalities in the technology sector. However, we want to look today at the financial world, and how significant bias there is limiting the opportunities of women too.

We can tell anecdotally that the financial industry is still male dominated, particularly at senior levels, and that on average more men than women come to us seeking investment advice. However, a new report, The Pathway to Inclusive Investment, has quantified the problem, and it makes for shocking reading.

For the report, BNY Mellon interviewed 8,000 people over 16 markets and 100 asset management firms and found that if women invested at the same rate as men, there would be an additional $3.22 trillion invested by private individuals today.2 Not only does this compound any other financial disadvantages experienced by women (such as earning less on average3), it also limits women’s collective influence on corporate behaviour and the world.

Make a difference

The report highlights that woman are more likely to value purpose beyond profit. They do want to invest, and they want it to have a positive impact on society, showing a particular interest in medicine and the environment. In fact, a poll of Good Housekeeping readers found that two thirds felt it was important their pension or other investments were in ethical or green funds.4 This is potentially powerful; if women invested at the same rate as men, it would result in $1.87 trillion of additional capital into responsible investment.5

We are hopeful that the increased popularity and availability of sustainable and ethical portfolios will encourage more women to invest.

There do remain some barriers that the industry needs to address:

Don’t be so bullish

The ‘boys club’ image of traditional investing can be off putting. A recent discussion about this on Women’s Hour considered that this was partly an issue of language.6 Financial jargon often assumes a degree of technical knowledge, and some of the wording in this sector can be particularly masculine and old-fashioned. As an earlier Dutch study found, much financial language has its roots in war and combat, heavy physical activity and construction – thus ‘bullish’ markets, ‘hawkish’ approaches, ‘fighting’ upwards, ‘tanking’ shares and so on.7 It’s something we try and address at Holden & Partners, mainly to avoid confusing jargon and to reflect our modern approach – but it is useful to know the benefits for inclusivity too.

The confidence gap

A lack of confidence has been identified as a major barrier to women investing. The Pathway to Inclusive Investment report indicated that only 28% of women feel confident in investing their money.8 This is linked to the perception that investment is just for high-risk takers, or that you need to have masses of spare capital to start off with – neither of which are true. Most portfolios can be tailored to your preferred level of risk.

In fact, women tend to underestimate their investment capabilities. Research by Fidelity has found that women investors outperform men: on average female investors achieve positive returns, surpassing men by 0.4% (in an analysis of annual performance across 5.2 million accounts from 2011 to 2020).9

Raising girls

Given that any financial education offered in school is limited (or indeed non-existent) it often comes down to parents and family to empower girls to grow up financially savvy and confident in their money management skills. This might include encouraging them to study STEM subjects, cultivating the habit of saving and discussing risk – games such as Monopoly can be helpful for this.

Investing for your child, in a Junior ISA for example, can provide a strong message that investing is for them – you could select a greener or more ethical fund, discuss its progress, the ups and downs in the market and what they might do with it on reaching adulthood.

Our own financial planner, Stefani Williams, became a partner at Holden & Partners last year and has plenty of views on what needs to change.

Stefani’s story

A graduate from University of Sheffield, with a BA Hons in Economics, Stefani joined Holden & Partners in 2013 and was made a partner in 2021. She was also a finalist at The Professional Adviser’s Women in Financial Advice Awards 2019 and was ‘Highly Commended’ by the judges.

Stefani always knew she wanted a people facing role, because building relationships and understanding the needs of others is what fuels her. Financial advice perfectly combined her interest in economics with that client-focused approach.

“It was hard at first breaking into a male dominated world,” Stefani explains. “At university about 85% of the people on my course were male, and at corporate events I often walk into a room full of men. It was intimidating initially! As an industry, we need to address this much earlier – organisations such as Holden & Partners, where we have a really strong culture of promoting and championing women, can still find it hard to initially recruit women as there simply aren’t enough coming up through the system. It’s something I’m particularly passionate about and plan to visit schools to talk to girls who are planning their next steps to inspire them about the options.”

More women working in the industry will also make it more attractive and relevant for female investors. This International Women’s Day, we are calling for the financial industry to #BreakTheBias and support women to take control of their own financial prosperity.

We have received lots of positive feedback about our updates. If you’ve found them useful and informative, we would be delighted for you to share them with friends, family and work colleagues. We are always keen to spread the word about our unique approach to financial planning and investing.

Please note that any thresholds, allowances, percentage rates and tax legislation stated may change in the future. The content of this communication is for your general information and use only; it is not intended to address your particular requirements. This communication should not be deemed to be, or constitute, advice. You should not take any action without having spoken with your usual adviser.

1 International Women’s Day 2022 (internationalwomensday.com)
2 The Pathway to Inclusive Investment (bnymellon.com)
3 Human capital estimates in the UK – Office for National Statistics (ons.gov.uk)
4 Good Housekeeping magazine, March 2022
5 The Pathway to Inclusive Investment (bnymellon.com)
6 Woman’s Hour, Radio Four, 4th Feb 2022, BBC Radio 4 – Woman’s Hour, British Vogue, Beijing Winter Olympics 2022 & Mummy Bloggers
7 The legacy of language in the finance sector (fool.com.au)
8 The Pathway to Inclusive Investment (bnymellon.com)
9 Women investors are still outperforming men, study finds (cnbc.com)

Contact us

Whether it’s a question about your personal finances or how you can invest your wealth more ethically, we are here to help. Call us on 020 7812 1460, email info@holden-partners.co.uk or complete the form: