Men investors tend to score higher than women when it comes to investment knowledge. They also tend to be more comfortable making investment decisions and taking advantage of investment opportunities. These gender differences persist even when correcting for income, investment wealth, and demographics, say researchers at George Washington University’s Global Financial Literacy Excellence Center and FINRA’s Investor Education Foundation, which sponsored the study.
Less than one-quarter of men answered “I don’t know” to at least three investment questions on the study, while for women the share was almost one-half.
Unfortunately, this lower level of investment confidence has an impact on women’s investment behavior and their ultimate investment results.
Less confident investors, including many women, are:
- less likely to start and fund an emergency account
- more likely to feel anxiety when making financial decisions
- less likely to plan for their own retirement
That means women are less prepared to take care of themselves financially, and are more at risk.
So what can we do about it?
- As CERTIFIED FINANCIAL PLANNER™ professionals and trusted advisors, we strive to help our women clients understand their finances so they feel empowered and confident in making decisions.
- We take advantage of opportunities to speak about personal finance, especially on topics relevant to women consumers – to professional, community, and academic groups to encourage women and girls to have a positive attitude toward money and a “can-do” approach to achieving financial independence.
- We’ve repeatedly earned the prestigious Women’s Choice Award® for Financial Advisors and Firms, spotlighting our commitment to women and financial education.
“By using financial education to increase investment knowledge, we can close the knowledge gap and empower women to make confident investment decisions,” say the experts at GWU’s Global Financial Literacy Excellence Center.
We are very encouraged by the outstanding research being conducted in the field, which will help us understand how men and women think about money and how we can improve all investors’ financial preparedness.