Investment priorities differ by gender – Twin Cities

Bruce Helmer and Peg Webb

Are women and men different when it comes to their finances? What tends to drive women’s financial decisions? How do they find the balance between saving, spending and planning for the future?

Historically, much of the academic literature on gender differences has focused on the level of trust in women. The data suggested that women lacked confidence in their money, while men “moved on”.

This dynamic has been reversed over the past 20 years. For one thing, women now control a greater share of household wealth, with discretionary power over $10 trillion in US household financial assets, about a third of the total. In addition, 9 out of 10 women who are married or living in a couple say they are involved in spending and investment decisions, up from 42% in 2012, according to Hearts and Wallets, a consumer research firm.

Perhaps even more surprising, women are expected to inherit 70% of the $41 trillion in intergenerational wealth in the United States over the next 8 years. This is partly because men marry younger women who tend to live longer. In addition:

• Women will own about two-thirds of private wealth in the United States by 2030.

• Women now earn the majority of college and professional degrees.

• There have never been so many women in the labor market and a significant number of them own their own businesses.

The effect on societal norms and expectations of this level of wealth redistribution is expected to be profound in the years and decades to come. Yet, while the pay gap between men and women is narrowing, it persists: In 2020, women earned 83 cents for every dollar earned by men. Therefore, are there noticeable differences in how women view their finances and do they need to rethink their traditional role in household finances and planning?


It’s partly genetic and partly learned, but women are different from men in their approach to money. Men have traditionally taken on the role of provider and women of nanny, but these roles have changed dramatically (and many say for the better). Women are taking a more active role as primary decision-makers in household financial and investment decisions.

This may be attributable to an industry-wide shift from stock picking and performance to more holistic, longer-term planning and education. This is how most women think.

Women are statistically better investors than men. According to a 2021 Fidelity Investments study, women earned positive returns on average that outperformed men by 40 basis points (0.40%) per year, based on analysis of 5.2 million accounts between January 2011 and December 2020.

Why is it? At the risk of painting the world with too broad a brush, women tend to be more conservative, buy-and-hold investors, while men trade more frequently. We’ve seen first-hand that women will seek out an investment idea more than men (in general), and women will more consistently accept advice from an investment professional than men (again, in general ). Men will often act on instinct or on the advice of a friend.

The pandemic has served as a catalyst for women to become more active with their investments. According to Fidelity, two-thirds of women now invest outside of emergency funds and retirement accounts. And at Wealth Enhancement Group, we’re seeing more women seeking advice and more education on financial planning, especially given the market swings we’ve experienced since March 2020. We haven’t seen the same level of commitment on the part of men.

Finally, many women tend to want to direct their resources to their values. In a study of affluent women, societal causes tended to play a more pronounced role than in men. For example, 95% of women ranked “helping others” and 90% said “environmental responsibility” was important to them.. Sixty-two percent of women say societal causes are more important than wealth accumulation, compared to 53% of men, suggesting that as women accumulate more assets, they can transfer more capital to charitable donations and social projects. This has also given rise in recent years to impact investing, and environmental, societal and governance (ESG) and diversity, equity and inclusion (DEI) themes are taking hold in investors’ portfolios.


That said, many women continue to say they lack confidence in their investment decisions and fear becoming the sole decision maker in their household. Because women statistically live longer, they are likely to worry about being left alone to make responsible decisions about family finances. Misconceptions about investing keep many women on the sidelines; too many of them have too much money in their emergency fund.


Regardless of their financial situation, women need to create a comprehensive financial plan that takes into account their beliefs, values ​​and goals. To create a plan, you need to think about the following questions:

• What is important to you and how can you align your values ​​with money?

• How will you generate sustainable income in retirement?

• How will you plan your tax debts in advance?

• What do you want to leave as a legacy to your heirs or to the causes you believe in?

A financial advisor can help you develop a plan that covers all of these points and more.

The opinions expressed herein are for general information only and are not intended to provide specific advice or recommendations to any individual.

Bruce Helmer and Peg Webb are financial advisors at Wealth Enhancement Group and co-hosts of “Your Money” on KLKS 100.1 FM on Sunday mornings. Email Bruce and Peg at [email protected] Securities offered by LPL Financial, member FINRA/SIPC. Advisory services offered by Wealth Enhancement Advisory Services, LLC, a registered investment adviser. Wealth Enhancement Group and Wealth Enhancement Advisory Services are separate entities from LPL Financial.

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