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