Why women should take charge of their wealth and investments

Financial service providers must do more to educate female investors and cater to their needs

Financial service providers have a crucial role to play in closing the investment gender gap, both through advice and education. Getty

When Patricia T was looking for financial advice, she was offered an expensive, high-commission off-the-shelf investment-linked life insurance product — not once, but repeatedly.

The Dubai-based marketing professional, who did not share her full name because of privacy reasons, says only one of the several advisers she has spoken to — she has consulted more than a handful — have asked about her personal situation or her life goals.

“My financial personality is risk-averse, so when I am dealing with investment advisers, I want them to work from that place. I want them to suggest products that suit my needs and my outlook, but so far, no one has delivered,” she tells The National.

Her story may be familiar to many women in the UAE and elsewhere.

Across the globe, male investors outnumber female three to one. Data from international comparison website BrokerChooser.com shows that 76 per cent of investors in 123 markets worldwide are men, with women making up the remainder.

Those numbers hold for the UAE while other countries in the GCC report similar breakdowns. In Saudi Arabia, men account for 86 per cent of investors (with just 14 per cent being women).

Lebanon leads the region with 28 per cent of women investors. The country closest to investment gender parity is the Philippines (56 per cent male to 44 per cent female).

The gap is so great that women will only accumulate 74 per cent of the wealth that men have at the age of retirement, a 2022 World Economic Forum study shows.

“There is something of a gender investment gap. It is partly cultural and partly to do with traditional gender roles,” says Keren Bobker, an independent financial adviser and senior partner at Holborn Assets in Dubai.

“The world of financial services is still a rather male one, with the majority of advisers being men and a lot of jargon used. These things tend to put off many women and you can find plenty of tales of women being patronised by banks and advisers.”

While it was traditionally men who handled family finances, Ms Bobker says everyone should be aware of their financial situation, even if one person takes the lead.

“Women are at least as good as men when it comes to managing their money, often better, so don’t be put off by a male-dominated industry,” she says.

Investment companies could certainly be missing a trick. Women are expected to have wealth estimated from $81 trillion to $93 trillion this year, according to the Boston Consulting Group.

In the Middle East, women’s wealth is expected to grow to $1.1 trillion this year, from $786 billion in 2020, at a compound annual rate of 9 per cent, according to BCG.

More than 40 per cent of women’s wealth in the region is concentrated in the UAE and Saudi Arabia, where, as of 2019, women controlled assets worth $102 billion and $224 billion, respectively.

But as a percentage, the female half of the world’s population is only in charge of about a third of its wealth as of 2020 — although they make about 90 per cent of household purchasing decisions regionally, according to 2019 Ipsos data.

Financial services gap

Financial service providers have a crucial role to play in closing the investment gender gap, both through advice and education.

Hannah Greenwood, a chartered financial planner and senior executive officer at Finsbury Wealth, is one of a handful of female financial advisers looking to support women investors in the UAE.

In 2021, the UAE-based wealth manager launched Unity Wealth, a division aimed at supporting women with their financial planning and wealth needs.

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“Unity Wealth was created for women, by women, and aims to ensure women are empowered to have the confidence to make informed decisions on all aspects of their finances, regardless of circumstance,” Ms Greenwood says.

Women approach investment differently than men, she adds.

“I tend to find that women are usually more risk-averse than men. When it comes to financial planning, women are particularly focused on step one of the process: Safeguarding family,” she says.

While ensuring the family is protected in the event of death or sickness is a critical component of a holistic financial plan, women must also consider other major aspects such as saving and then investing — which is where she comes in, Ms Greenwood says.

Unity has also helped women clients going through significant life changes such as a divorce or the loss of a partner or family member, she says.

Unity Wealth is part of a growing international trend for women-focused financial advisories.

In the US, Ellevest, founded by former Wall Street executive Sallie Krawcheck, offers financial planning and coaching services aimed at women.

In April last year, Ellevest raised $53 million in series B funding. Women and women-led equity firms were significant participants.

Similar companies exist in the UK, the EU and India.

Inclusive investment landscape

Meanwhile, some established players are working to embed inclusivity across the investment landscape.

Last year, US-based investment management company BlackRock launched many illustrative model portfolios for women to help registered financial advisers better support their female clients.

The multi-asset portfolios incorporate three specific points that differentiate men and women investors: Life expectancy, income gaps and employment gaps.

Around the world, women outlive men by an average of three years, according to the World Bank, with a life expectancy of 75 years in 2020, compared with 72 years for men.

Over their lifetime, women earn about 20 per cent less than men, the UN says. They also spend 1.2 years out of the workforce to care for children or elderly relatives, BCG data shows.

BlackRock’s model portfolios aim to factor in these challenges so women can count on a secure retirement despite these gender gaps.

In the UAE, National Bonds, the Sharia-compliant savings platform, last month teamed with Arab Women Authority, a regional NGO, to run a seminar on the importance of investing, with a specific focus on women.

“Investing is crucial for economic development and women, in particular, play a vital role in the advancement and prosperity of communities,” says Rehab Lootah, deputy group chief executive at National Bonds.

“Empowering them with financial education and investment avenues is essential for their financial security, as well as that of the country.”

The world of financial services is still a rather male one, with the majority of advisers being men and a lot of jargon used

Keren Bobker,
senior partner at Holborn Assets

“Our goal is to equip women with the necessary knowledge and tools to bridge the gender investment gap, inspiring them to dream big and reach new heights.”

Women comprise about 50 per cent of National Bonds’ sukuk holders and the company expects the number to grow rapidly.

Role of education and personalisation

Research has shown that women feel less confident about investing than men. But that could be because they are more wary of taking risks, Ms Greenwood says.

“Education is part of our role as financial planners. We need to help our clients understand the markets, the opportunities, the steps involved and their financial goals and objectives,” she says.

At start-ups such as UAE-based RuDo Wealth, financial education is an important component.

Co-founder Masooma Elahi, who organises events on personal finance management in the UAE, says: “In interacting with women, I am happy to see them increasingly becoming financially independent, they are confident in making personal financial decisions. All they need is the right information to continue the flow.”

The app offers the sort of DIY approach that many advisers fail to deliver.

By automating savings and investments through a micro-investing app, the UAE-based FinTech company hopes to help women — and men — build wealth in a sustainable way when it launches in the near future.