International Women's Day Special Blog

Mar 08, 2021 | Sheila Whitehead


Why do women invest less than men? Are there fundamental differences in men and women's investment habits? Do men and women view money differently? In honour of International Women's Day, we examine these issues in more detail.

For decades, wealth management has been a male-dominated endeavor. Not only are the vast majority of financial advisors’ men (female representation is just 15 percent [1]), but the clients making financial decisions are far more likely to be men than women. In two-thirds of affluent households in the United States, men are the key financial decision makers [1]. These numbers are surprising given the fact that women now control a third of total US household financial assets—more than $10 trillion, a number that is forecast to grow dramatically in the next ten years [1]. Women are increasingly controlling more household financial assets, yet this increase in control has not translated into a corresponding increase in decision making when it comes to investing. What is even more surprising is the slow rate of change in the advisory profession. Women now outnumber men in medical and law schools, but still lag men in MBA (Master of Business Administration) school at a ratio of 64% men to 36% women [2]. And while the percentage of female financial advisors has mainly stayed the same over the last decade, the percentage of male nurses, a traditionally female-dominated profession, has grown from 2.7% in 1970 to 12% now [3]. When such great strides have been made in gender equality in so many areas, why does wealth management lag? And what is necessary to move the dial?

There are a few reasons cited for the gender gap with investing:

  1. Women have less money to invest. On average, a woman still earns 80% of what a man earns [4]. Therefore, women have to save a higher percentage of their salary to have the same amount of money in retirement savings. In addition, women live an average of 5 years longer than men [4], so they have to stretch their savings even further! The lower earnings from smaller paychecks likely explain why women invest 40% less money than men [4]. It would also explain why women tend to have a more conservative approach to investing, as they want to protect what they have saved. Of course, this also means it is even more important for women to begin investing early so that their portfolios can grow over time and provide them with the funds they need for their longer lives. Women also need to understand that taking on an appropriate amount of risk is important for growth, and that keeping money in low interest savings accounts and GICs (Government Issued Certificates) can be detrimental to achieving their long-term goals.
  2. Women view money differently than men. In general, men may be more focused on wealth accumulation while women may be more focused on wealth preservation. Money is a means to an end for women and they want to have enough to provide security for themselves and the people and causes in their lives that they care about. Men may view money as a scorecard that reflects their success. This difference in attitude may explain why men tend to have a more aggressive investment style while women tend to be more conservative with their approach. The irony is that despite investing less and more conservatively, there’s evidence that when women do invest, they are better at it. Fidelity Investments client data showed on average that women performed better than men when it comes to investing (by 40 basis points, or 0.4 percent) and were able to add more to their account balances over time (12.4% compared to 11.6% for men) [5]. Men could learn from the ladies here that rather than chasing performance, adopting a slower and steady investment approach may provide better long-term results.
  3. Women find investing confusing. No surprise - as it can be confusing! But this is not a gender issue, it is just as confusing for men with limited knowledge. There is so much financial jargon used in the investment industry that you could make the case that it was designed to create confusion! However, where there is a gender difference is in how men react to the complexities of financial management – they have much more confidence when making decisions and managing their money even if they have no more knowledge or understanding than women in the same situation. According to one study, only 52% of women say they’re confident about managing investments, compared to 68% of men [6]. The most concerning results of the study show that anxiety about investing has carried on to younger generations with 56% of millennial women not willing to invest because they are too worried about the outcome [7]. This does not bode well for the argument that the gender gap is gradually narrowing!

So - what’s the answer? We need to provide more education about investing to women and girls and it needs to start early. Individuals who understand investing are less likely to be intimidated and more likely to do it. Who enjoys spending valuable time on activities outside of work that are difficult to understand and that have large stakes if done incorrectly? Early high school courses on the basics of investing for women, would help level the field from the start. But more education at any stage would be helpful. Greater knowledge will lead to greater participation and greater participation in the markets by women will lead to more women considering the profession for a career. It’s time to get the dial moving.


Work Cited:

[1] Baghai, P., Howard, H., Lakshmi, P. & Zucker, J. (2020, July 29). Women as the next wave of growth in US wealth management. McKinsey & Company.

[2] (n.d.). Male/Female ratio of MBA Students in Canada. Retrieved March 1, 2021 from

[3] Egan, B. (2019, May 6). The Male Nurse: Benefits and Percentages of Men in Nursing. Southern New Hampshire University.

[4] Chatzky, J. (2018, September 25). Why women invest 40 percent less than men (and how we can change it). NCB News.,their%20cash%2C%20explains%20Cary%20Carbonaro%2C%20CFP%20and%20

[5] Fidelity Investment Survey Reveals Only Nine Percent of Women Think They Make Better Investors then Men, Despite Growing Evidence to the Contrary. (2017, May 18). Fidelity Investments.

[6] Women & Financial Wellness: Beyond the Bottom Line. (n.d.). Merrill A Bank of America.

[7] Majority of Millennial Women Have Money to Invest, But Fear Holds Them Back. (n.d.). SoFi.