RP: Research into couples and their personal finances consistently shows that it still tends to be men who make investment decisions. But women tend to have a different attitude toward investing, and when they are involved, they often make better choices. Dr Moira Somers is a financial psychologist at the University of Manitoba.
MS: My understanding of the current research is that women are much more conservative investors. They often wait far too long to get into investing. When they do start investing though, they tend to have better returns than men, because they are more prudent. They don’t seek the extreme reward end of the spectrum. They are content with more modest returns and they tend to achieve them.
RP: Surveys repeatedly show that money is one of the main causes of stress. Women are especially prone to worrying about it.
MS: Another gender difference is that women tend to stress more about money. They will acknowledge that they lose sleep more often than men do. And, sometimes, that’s because they do not have sufficient knowledge of their own family finances. They’re not the ones in control. You know how sometimes it’s harder to be a passenger in the car than a driver? You’re glad somebody else is driving but you still have absolutely no control about what’s happening. So, it’s a different kind of stress.
RP: So, a lack of knowledge about investing is one reason why women aren’t more involved in investment decisions. But Dr Somers says there’s another key factor.
MS: When we survey them, when we work with them to say: “How come this isn’t so easily transferable for you? You have brilliant skills in household management, why is this not translating into the broader financial picture?” And some of it, frankly, has to do with mistakes that advisers make. There are some real big turn off’s, real big mistakes that just leave women feeling stupid and embarrassed and uncomfortable and so they vote with their feet.
RP: Having the wise counsel of a good financial adviser is extremely valuable. There are signs that the advice profession is starting to serve women better than it has in the past, but there’s plenty of room for improvement. So, don’t be put off by negative experiences. Find an adviser you trust and feel comfortable with. You can find out more about Dr Somers’ work via her website, moneymindandmeaning.com. That’s moneymindandmeaning.com.
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