The ball is in our court.
The myth is that young people are ignoring our savings goals. But the reality is we often don’t feel well-equipped to plan for them, other than stockpiling cash in bank accounts.
Investing will be a key part of that planning for the lion’s share of today’s savers and could well be the difference between reaching our goals and missing out.
And with ‘getting everyone investing’ the goal here at Freetrade, we have a strong interest in exactly that - getting everyone investing.
On the face of it, it can seem strange to look at investing through a gender lens but the research suggests men and women embrace it in very different ways.
The split of male to female customers among the top 10 DIY investment platforms in 2020 was 68 to 32.
There is a view that this imbalance is down to women being turned off by images of testosterone-fuelled trading floors and being more risk-averse with their money.
But is that just a clumsy stereotype? Why aren’t women investing more and how can we all help to level things out?
We caught up with a range of women working at Freetrade, finance content creators and community members to find out.
“Women tend to talk about budgeting and saving, but not necessarily about investing. I wanted to change that. I think sometimes we're more likely to listen to people who are more similar to us, so I'm hoping just by talking about it I'll encourage more women into the world of investing.” says Anna Rozanska, a.k.a Panda Boss.
The YouTuber and finance blogger is keen to shake the perception that investing isn’t for women, and make it a less daunting prospect for beginners.
For Anna, making investing more accessible and less complicated is paramount in attracting first-timers. She says, “I think platforms like Freetrade are actually already doing this. Running workshops aimed at women would be a good idea, as I can see this being a less threatening environment.”
Education is a key part of the conversation for Freetrade user and founder of marketing agency Auxo, Lauren Dudley.
“I got through my entire childhood without anyone having a conversation with me about financial growth. I was 22 years old when someone close to me started to educate me, falling on admittedly deaf ears.”
“It was only upon the introduction to Freetrade, that I realised not only was this accessible to me as a woman and a person of a not-well-off background, but also that I didn’t need £25,000 to start.” says Lauren.
Quite often this idea that investing is the preserve of the rich is a barrier many investors face. Lauren is proof that the important part is starting, not having millions to begin with.
“I started with a tenner, and just kept adding.” she says.
Kicking off that journey and keeping contributions consistent is an integral part of racking up that snowball effect which can be so beneficial for our money the longer we give it to grow.
Factoring that into everyday life and not seeing each contribution as a roll of the dice has been core to the investing journey of Freetrade’s senior finance specialist Emily Weir.
Emily explains, “I have built the habit of becoming a regular investor by understanding how much I want to set aside each month, picking a number of key things I want to invest in and putting money into them on a monthly basis. Building this habit has given me the confidence to look at other investment options to expand my portfolio.”
As Lauren and Emily say, that first step doesn’t have to break the bank and given everyone’s lack of experience at the start it probably shouldn’t.
Learning through doing is an important part of the next stage of investing and is one Freetrade’s head of performance marketing Lena Vasileiadou takes seriously.
Lena says, “I started out buying companies that I knew and loved. I then slowly moved to thinking about my portfolio as a whole and structuring a bit better what I wanted to invest in, in order to have enough diversification and to minimise risk. I looked at the balance of equity ETFs versus individual stocks, bond ETFs and commodities.
“Within the ETFs that I chose, I looked at covering different geographies, as well as industries that I see growing. I still need to get better at evaluating individual companies and spotting opportunities.”
But what about the assertion that women tend to be more careful decision-makers, are longer-term thinkers and are less likely to tinker with their investments than men?
“In my experience, women are often more methodical in investment decisions and are less driven by the anticipation and adrenaline of a big ‘win’.” says Lauren. “I find, within my circle, that we’re more likely to hold our nerve for longer periods, rather than trying to make money throughout the ups and downs.”
And that might actually be a very good reason for women to get involved. Anna says, “I've also seen this in many studies carried out by investment platforms. While women are less likely to invest, when they do, they can actually end up outperforming men over the long term due to these characteristics.”
But, as education and access to investing grows these positive traits will become less gender-specific says Emily, “Having more female role models communicating that investing is for everyone will push this towards more of an outdated persona as investing becomes easier and more accessible to all.”
First, the industry needs an image change.
“I don't think it’s an industry that naturally attracts women,” says Lena. “It is still tainted with the older stereotypes that we've seen in movies, like The Wolf of Wall Street and The Big Short, greedy rich men in suits.
“It is changing though, especially in very recent years with personal finance opening up more broadly as a topic and more and more young people improving their financial knowledge and getting into investing.
“Of course fintechs and easier access to investing have played a significant role in this development, so that not only more and more women are being attracted to investing but equally minorities and people from diverse financial backgrounds."
Part of shedding that banker bravado image needs to come from the companies we invest in too.
Women now hold a third of board positions in the UK’s top public companies but more work needs to be done to hit at least the same figure when it comes to the actual leadership teams within those same companies.
And representation is just as important among personal investors, says Lena, “Showcasing more female investors and the female perspective to investing would encourage more women to invest.”
There’s more women can do to help each other too, says Emily, “We need to get the conversation going. How many women do you hear talking about investing over brunch? If my friends are anything to go by, it's not many. Maybe I'll bring it up at my next one!”
“I generally look for stable companies with a good track record, and a good financial outlook. If there are any issues like high levels of debt I try to look for any reasonable explanations for it before I make a decision. Also, don’t invest in things you don’t understand.” says Anna.
Emily incorporates how a company fares on its environmental, social and governance (ESG) standards into her investment decisions, “I wouldn't personally invest in a company that very clearly didn't align to ESG values. It definitely plays a part in my investing and I like that Freetrade has a section for ‘High ESG score’ companies.”
For Lena, the investing principles are simple, “Have a plan, be diversified and think about the long term.”