Panel 1 marg franklin

Women & Risk: Myth or Market Opportunity Financial Services and Products Margaret Franklin, CFA

What’s wrong with this picture?

• Women are not a homogenous cohort… duh!

• Critical differentiators – – – – – –

Age Education Income Assets Experience Marital status

What’s Wrong with this Framework • Anchored in accepted norms which are malebiased • Correlation does not equal causation • Risk aversion is not the same thing as risk awareness

Conclusions?

Research Conclusions: • Women are less confident about investing & financial matters than men • The gap between size of women’s portfolio and men’s is a result of risk aversion • Women aren’t as interested in financial matters

• Women are risk averse

Another Perspective: • Women require more information to assess risk and return trade off • Women save less because they earn less, can’t afford undue risk • Women are dissatisfied with the service they receive and are perfectly prepared to wait until they get good service • Women are risk aware

A bit about Risk and Financial Services • Measurement ≠ management or understanding • Measurement gives appearance of precision and certainty • Risk ≠ uncertainty • We can’t measure uncertainty

The Challenge • Women are dissatisfied with financial services most, even ahead of the auto industry! • The industry has not addressed the primary requirement: Better information + Better education + Better communication Enables Decision Making

The Opportunity • The female economy is the largest emerging pool of wealth • Addressing issues of information, communication and education improve the entire system