Women's financial investment lower than men's

According to a study by BNY Mellon Investment Management, women still invest less than men. Yet if their financial investment were similar, there would be an influx of at least $3,220 billion in additional assets under management. What are the obstacles to women's investment? Here's how.

A potential $3,220 billion in additional capital

US asset management company BNY Mellon Investment Management (IM) has published a study on women's financial investment, to better understand the factors behind the persistent gender gap in this area.

This study, carried out by Coleman Parkes Research for BNY Mellon IM, was conducted by gathering the opinions of 8,000 women and men in 16 different countries, including France, across 100 management companies handling a total of almost $60,000 billion in assets at the end of Q2 2021.

According to the results of the study, if women invested as much as men, " there would be at least an additional $3,220 billion in assets under management by individuals today ".

Furthermore, as BNY Mellon IM's research has shown that women are more likely to make investments " with a positive social and environmental impact ", there would be an additional $1,870 billion of capital in responsible investment if women and men invested at the same rate.

A sector designed for male investors

According to the study's findings, there are 3 main obstacles to higher investment by women. Firstly, only 28% of women feel confident enough to invest their money, which BNY Mellon IM describes as a " commitment crisis ".

" Among the key aspects of financial decision-making, investing is the area in which women feel least comfortable, compared to decisions aboutsavings, real estate or retirement," explains the US asset management company.

What's more, they believe they need close to $4,100 in monthly disposable income, or almost $50,000 a year, to be able to invest. Yet, according to BNY Mellon IM, " only a small amount of money is needed to start investing ".

Finally, a very high proportion of women - 45% worldwide - consider investing in the stock market to be too risky. More specifically, 49% of women surveyed declared a moderate level of risk tolerance when it comes to financial investments, 42% a low level, and only 9% a high or very high level.

However, according to British financial expert Iona Bain, investment doesn't always " come with extremely high stakes ". "Nor is leaving money in a savings account completely risk-free. Indeed, during a period of low interest rates, money left in a savings account suffers a drop in purchasing power over the long term, as it remains below inflation ", she explains.

However, there were significant differences between regions of the world. For example, only 20% of French women surveyed said they believed in their ability to invest, compared to over 40% of American, Indian and Brazilian women. 62% of French women even said they were not interested in investing, and 42% were reluctant to turn to a financial advisor.

According to BNY Mellon IM, part of the responsibility lies with the industry, which is essentially designed for men. For 86% of asset managers, the default client is a man, and 76% admit that " their organization's investment products are primarily aimed at male investors ".

Yet, according to the study's conclusions, " women's investment can change the world [...] because women are more likely to invest in causes they believe in, such as protecting the environment ". For BNY Mellon IM, one of the levers for women's investment is financial education.