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Advisors, take note. What follows is yet another reason to focus on female prospects and clients. They’re boosting their ownership of equities and doing so in significant fashion.
Fidelity’s newly released 2024 Women & Investing Study shows 70% of women surveyed own stocks – up from just 53% last year. Sure, it helps that the S&P 500 is up almost 35% over the past 12 months, but there’s likely more to the story.
Other studies and surveys have shown that women are often less risk-tolerant than men and while women are better savers than men, they’re previously been less apt to embrace stocks. Some polls have indicated that’s due to a lack of confidence or feelings of intimidation, the findings of the Fidelity survey are encouraging. It can be gleaned from the poll that women are increasingly confident, empowered and aware that stocks are pivotal when it comes to building wealth over the long haul.
Another reason it’s encouraging that women are gravitating to equities is that it could make them more inclined to seek education and professional advice. Data indicate that women approach investing risk far differently than men, making the former more likely to consider hiring an advisor than their male counterparts.
Consider the Demographics
Not surprisingly, increased levels of equity ownership among women puts a spotlight on demographic trends that advisors need to be aware of.
“While younger generations continue to invest in higher numbers, the percentage of Gen X and Boomer women who invest in the stock market jumped the most year-over-year, increasing 18% and 23% respectively,” according to Fidelity.
Context maters. Fidelity notes that millennial women are boosting ownership of stocks because they view it as a wealth-building tool. Conversely, females in age groups above millennials view owning stocks as the way to fund future goals such as reducing debt and funding solid retirements. Across age ranges, it appears as though women have their financial priorities in the right place, but underscoring the need for advisors, women are still stressed about money.
“While women continue to make progress, they’re still feeling the impact of financial stressors. More than half of women surveyed admit their financial situation keeps them up at night at least monthly, and those numbers are higher for Gen Z (72%) and Millennial women (68%),” adds Fidelity.
Speaking of Gen Z Women…
In theory, Gen Z isn’t the demographic many advisors are focusing simply because they’re young, some are still in college and many don’t yet substantial assets to bring to the table. All of that may be true, but there are reasons for advisors to place more emphasis on Gen Z females.
For example, Fidelity points out that 38% of women in this age group invest outside of retirement accounts compared to 28% of women overall. Plus, Gen Z women enjoy researching investments and while some of that includes social media, they see value in working with advisors.
“Gen Z women still see value in trusted resources – 89% have already gotten or plan to get help from a financial professional to better manage and grow their money,” notes Fidelity.
Related: Why October Is the Perfect Time to Talk Retirement Planning