Women are slowly becoming “azadi” of the patriarchal style of investing
Wealth management is also going digital like other companies. Fintechs are completely changing the global investment landscape as data analytics, AI / ML, and AR / VR tools have expanded significantly over the past two years.
This can be felt by the unique gamification seen in investment, insurance and lending platforms, and by the constant increase in fully automated or robo-advisory models. Nationally, too, we are seeing rapid growth in these technology-driven platforms, driven by next-generation individual investors – both individuals and HNIs.
It goes without saying that women are equally contributing to this evolutionary trend as they constitute nearly 50 percent of the Indian population.
The participation of women in the labor market has also increased, driven by increasing awareness of education. This created opportunities for women to earn a living and become financially independent.
But women generally face different challenges than their male counterparts who tend to define their mindset when it comes to investing. Women go through multiple events in their lives that impact their professional careers and progress – change of location due to marriage, lack of secure work opportunities, uncertainty about accepting an active woman by in-laws, birth of a child, etc.
Unpredictability on the personal / professional life front leads to a preference for goal-based investing that has relatively better defined outcomes.
Increase in HNI in women
As the life expectancy of women is longer than that of men, they also tend to invest in guaranteed savings, annuities and traditional insurance products to deal with longevity risk. But many young women also take on the role of entrepreneurship, go it alone and raise venture capital.
As this cohort of women is more financially literate, they also invest in PE / VC funds over time. Few are also turning to angel investors to provide seed capital to emerging risk takers. This has led to a sharp increase in the number of women with HNI.
New economic opportunities and the growth of emerging sectors will lead to wealth creation and more HNIs in the years to come.
Invest in ESG funds
Women tend to be more attentive to the influence of their investment decisions on society and the environment in general. Therefore, socially responsible investing / environmental social growth or impact investing is at the heart of their discussions with wealth advisers. This trend has accelerated over the past year due to the awareness led by the pandemic around climate change and the protection of natural habitats.
One of the 25-year-old daughters of our client UHNI Family Office, who started working after graduating from college, began dealing with her own investments, initially sown by the father.
Now earning a nice salary as well, she is keen to invest all of her monthly income and says this pandemic has made her aware of her needs versus her wants.
In addition, as a wealth manager, she wants us to invest the money only in companies that respect the environment and do not create waste. It’s music to my ears that this young millennial woman not only wants to shop as needed, but also wants her funds to be invested responsibly.
Over the decades, the only exception I’m used to hearing is avoiding companies that love alcohol, gambling, non-vegetarian products, exceptions that have emerged from their religious ethos.
Changing women’s investment preferences
We are seeing a steady growth in the number of women eager to acquire financial literacy that was seen as complex. To add to the above, we also see individuals keen to manage their own wealth as an individual while it folds into a large family wallet.
They like it to be kept as a separate, non-fungible entity just to make sure they have a say in their own funds and also the style they would like it to be managed, which is not. not necessary in agreement with other family members.
While a group of female investors that we see are cautious and want their funds invested as ‘safety capital’, we see a gradual discussion and shift in asset allocation from debt to equities. as an asset class.
There is more discussion about many women entrepreneurs who are in unlisted spaces, running large companies and how to participate in this private market to develop the portfolio.
For example, our women investors know Nykaa and being a user, seeing it managed by a dynamic and efficient professional, they wish to participate. They feel confident that they are end users themselves.
Traditionally, women have pressed me to allocate funds for physical gold, seeing their millennials lack interest in jewelry. but now they are open to buy gold as an ETF just like any other debt or equity investment.
There is a shift in thought process, approach, own voice and understanding, which was almost nonexistent two decades ago when I started.
I only met the women in the family for their signatures and they just signed the papers without even knowing what they were signing. Having seen three generations of women, I think this transition is eminent.
Here is another example of diversity and progressive independence… After almost a year I walk into the salon, my hairdresser’s assistant is a young girl who must have overheard my conversation in the past and who is smart enough to understand that my job is to help invest funds.
With a little hesitation but with the subject’s confidence, she shakes her existing stock mutual fund SIP and asks for my opinion.
This is the new India and I think it’s true azadi for Indian women of the patriarchal style of investments.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)