Women and Finances

A couple of months ago, the husband and I decided to invest in a SIP (systematic investment plan) for our child’s safe and secure future. Since I’ve always been good with financial management (daughter of two established auditors, it’s in my genes!) the responsibility to research fell on my very capable plump shoulders! I researched and then decided to engage the best portfolio manager.  Talk to him, explain our needs and then invest right? Wrong! 

Imagine my shock when on a long-distance call from the UK to India, this financial advisor asks to speak to my husband. A polite explanation of my husband not being available was met with – we can talk when he is. After calling his supervisor, probing his reasons for the same endlessly – the best he could come up with was, women don’t understand investments. The virtual slap stung more than any physical ones I have received. But, if I thought it was a momentary glitch in a smooth road, I was soon relieved of any such expectation. The nominee’s name was Rituparna Kini (compared to very clear instructions of Ghosh), the statements were shared only with the husband, calls went to him for decisions.  It went on for a while, till we got stuff done online and life went back to normal again. But it did leave a bad taste in my mouth, enough to vent to my girlfriends. Imagine my horror when 2 out of 3 had similar stories to share.  That made me get down to the root cause of why there is a perception of women not being strong financial planners, even though they’ve traditionally managed the household finances.  

Forget women managing their finances, considerable research by the bigwigs like Harvard and Forbes shows women only occupy 20% of executive roles in America’s financial sector. The number was no different in the most gender-equal Sweden, where only 5%-20% of women held positions in the investment banking team. 

Women are breaking barriers and marching on straight in every field, so why not in this? Is it really a myth? More research showed the times are changing, albeit slowly. What makes this progress slow? 

  1. Conditioning: There is the age-old belief of girls being not good at maths. This conscious/unconscious bias still exists even though there is no scientific proof. But this belief gets further re-emphasised because of the lack of women in the financial sectors. 

Imagine growing up with the subtle yet constant reminder of not being good in a field? Now add that this industry survives on more jargon than medicine, plus the ruthlessness of your career always hinging on one deal. Long working hours. Need I go on? For a woman who is coming out and breaking the barriers of patriarchy, wouldn’t they instead work in a field where they don’t have to fight this bias? 

But for the loop to break, this outlook has to change – the theory of ‘if you can’t beat them join them’ might not work here. Keri Gohman, president of Xero Americas, a cloud-based accounting and payroll SaaS provider for small businesses says “When you take all of the energy spent on fitting into a narrow box and unleash that on your work — magic happens. When I allowed myself to be the boldest version of myself, I realised I was more willing to take risks, to be more powerful — and my true capacity was unleashed.”

  1. Money mindsets: The second reason could be how women approach money. Contrary to my belief, research says women are uncomfortable around talking about money. A study by Fidelity investments shows that 56% of respondents avoided discussing finances with friends or family – because money was “too personal,” while 35% didn’t share their financial information and 27 % were raised not to discuss finances.  Further drilling brought forth the fact that women feel intimidated and underconfident while talking about finances.

According to Kathy Murphy, president of Fidelity’s Personal Investing:

“Beneath women’s reticence to talk about money lies a lack of confidence in their knowledge of financial planning and investing. This lack of confidence is really self-imposed. Our analysis of more than 12 million investors shows that women actually demonstrated stronger saving rates than their male counterparts and enjoyed better long-term investment performance when they did engage. Unfortunately, too many women still hesitate to take control of their finances.”

  1. Safety and security – Women do not play for returns. According to a study done by Engine MHP London, 52% of women prefer low risk despite being aware they will receive lower returns than 36% of men. And 38% of women invest in keeping money safe, compared with 21% of men. Hence, they are often overlooked in the ‘High risk, high reward’ market. This could be an advantageous trait to have when planning for a longer run, especially considering the surges and dips the financial markets have seen last year alone. But, financial advisors warn against this approach. Considering women live on an average five years more than men and are still fighting for equal pay – Maike Currie, investment director, Fidelity says “As women, we risk falling into a glaring ‘investment gap’, by leaving our money in cash and steering clear of the stock market.”
  1. Unequal Gender pay – A survey done by Payscale in 2020 showed that the gender pay gap, which takes the ratio of women’s median earnings to men without controlling for various compensable factors, has only decreased by $0.07 since 2015. In 2020, women made only $0.81 for every dollar a man makes. By calculating presumptive raises given over a 40-year career, we find that women in the uncontrolled group stand to lose $900,000 on average over a lifetime. This not only undermines a woman’s confidence but leaves them with considerably less money to invest. 

Erm, getting all the research done softened me enough to warrant another conversation with my advisor. Taking a deep breath and filling myself with some sugar to sweeten it, I dialed him again. To my surprise, the conversation went… well. We talked about investment plans, risk, long-term planning, and even market index and stocks – which the poor guy had to explain to me.  Towards the end, I asked him what changed, expecting him to say – ‘supervisor’s intervention’. But what he said blew me away, he apologised for being foolish and then mentioned that he wasn’t even aware when this unconscious bias had crept in, cause at his B school women/girls always beat him in most finance-related subjects.  

My heart warmed to see that the times are changing; people are ‘listening’ a lot more and ‘assuming’ a lot less. And if we try, we can quicken the change – the first essential step is communication. If you are a woman, do not hole up and let the fear keep you stuck, speak up, ask stupid questions – it is your future at stake. If you are a man, encourage your partners, friends, girlfriends to take charge. And while at it, ensure you promote a conducive environment for women to work in. The second step could be that the industry could do with a refresher in making the terminologies more layman-friendly. By making it more straightforward for women to understand their investments’ pros and cons. Hopefully, that’d help women talk about their savings the way they can talk about anything else. Working in any industry for a long time builds experience, but unfortunately with it comes judgments. 

Last but not least, the next time you come across the bias of women not being financially sound, do not subscribe to it! 






About The Author

Rituparna Ghosh is the Author of Unloved in love (Readomania, 2019) and The boy with a Guitar ( Readomania, 2021). She has also contributed to different anthologies. Read her other short stories at  https://www.readomania.com/author/buttercups.

 Currently living in the UK with her family, she holds a novel-writing diploma from the London School of Journalism. In her day job, she runs her own practice as a  Transformational Life Coach. Follow her on Twitter @rituparnag or Instagram @unloved.in.love

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