It's the retirement years that will hit women the hardest. They'll live longer than men but will have less money saved to spend. In the final part of the Herald's Women and Money series, Jane Phare looks at what needs to change to encourage women to invest more, and why they're good at it when they do.
Brooke Roberts reckons she's proved that women are equally competent and confident enough to invest if the environment is right.
Roberts, 32, is a co-founder and CEO of online investment platform Sharesies.
She's encouraged that in an area where women are woefully underrepresented, half of the 67,000 investors on her platform are female. Dejargonising the language and keeping investment explanations simple helped secure that 50/50 gender split of people now investing more than $106 million using the site.
Roberts is familiar with the world of money, first studying for a masters in finance, then working for Kiwibank and Xero before Sharesies was launched in 2017. But she thinks women are by and large excluded from that world.
"They've been left out of these conversations."
Sharesies commissioned a PinkPaper investor survey from Colmar Brunton which showed that only 14 per cent of Kiwi women invest in shares, compared with 25 per cent of men. Roberts wants to change that.
The Sharesies 50/50 gender split proves women want to be involved, she says.
"It's about providing the right environment for that to happen."
The industry has been male-dominated for too long and that it makes economic sense to encourage women to invest more, potentially to the tune of billions of dollars.
The PinkPaper showed that of more than 300,000 retail (or small) investors, with investments worth $80 billion, two thirds are men.
"If we were able to increase women's participation in investing, even by 50 per cent, that could add a staggering $11b to the New Zealand markets," Roberts says.
Gillian Boyes, manager investor capability for the Financial Markets Authority (FMA), agrees, saying women face a gender gap in financial literacy, earnings and investing.
Many will have taken time off for child rearing, or looking after other family members, and will have lower incomes. That means they are like to have considerably less saved for their retirement and could well be on their own.
There's little doubt that women are fighting financial inequity on several fronts. Westpac's New Zealand boss David McLean was startled to discover a 30 per cent gender pay gap when comparing the median hourly pay of the bank's male and female staff. He called it "occupational segregation", women choosing to take on lower-paid roles and not enough women in senior, higher-paid positions.
It is Boyes' job to encourage more people to become investors, but particularly women, rather than leaving all their savings in the bank. She wants women to consider a slightly more aggressive KiwiSaver fund as a way to help close the gap.
Last year the FMA ran a campaign to encourage women, particularly young women, to engage more with their KiwiSaver, to check their savings options were right, read their statements and check they weren't paying too much in fees.
Aware that getting young women excited about their retirement savings was going to be as tricky as rolling gold bars uphill, Boyes' team used social media, including beauty bloggers and online influencers with big followings to spread the word, a move she acknowledges was "quite sexy" for a government department.
They recorded interviews with women talking about how they had managed their own KiwiSaver accounts, and promoted the videos through social media.
"I've found women are really confident discussing investing with each other."
It makes sense to talk to women about money, she says. "We know that women influence their families. By talking to women they then talk to their children and their partners so you get that double-up effect."
Good role models, like the women who founded online investment platforms Sharesies and Hatch, are essential too, she says. They dejargonise money and give women the confidence to start an investment portfolio, even if only with very small amounts.
Best to just start
All investors learn by doing, she says. Her best advice to women is to "just start" and, because young women have the advantage of time on their side, the sooner the better.
The Commission For Financial Capability (CFFC), the office of the Retirement Commissioner, agrees it's a win-win for women to start early with investments. They run sorted.org.nz, an easy-to-follow website encouraging people to think and talk about their finances, with simple advice, information and chatty blogs.
CFFC's managing editor Tom Hartmann says because women tend to live longer but earn less over their lifetime, it is critical that they get more involved with their KiwiSaver.
Once they've got the settings right Hartmann's best advice is to "set and forget," something women are good at. There's plenty of research to show that when women do invest, they're better at it than men. They do their research, make a plan and stick with it, exactly the right strategy for successful investment.
Men, on the other hand, tend to be more impulsive, chopping and changing if they see their investment portfolio dipping. They end up paying more fees and, in the long run, losing out.
While women prove themselves to be good investors, the problem is getting them to invest in the first place. A CFFC barometer survey of women and finances showed women were more stressed and worried about their finances than men, they borrowed and invested less and were more likely to rely on someone else for financial decisions.
Personal finance columnist Mary Holm thinks the money industry doesn't help itself, to some extent making finance seem more difficult than it needs to be.
The likes of banks, stock brokers and KiwiSaver providers aren't all that good at communicating without using jargon, she says.
Think again about using terms like "opportunity costs", she warns. They're a turn off to newbie investors and particularly women.
Sue de Bievre, CEO of online accounting platform Beany, says women need to take some responsibility for their financial wellbeing. She points to UK research done by investment bank UBS which shows just how much women abdicate responsibility for long-term financial planning and investment.
Although women are good at short-term decisions, like what groceries to buy today and who will pay the power bill, they leave long-term decisions around retirement or investment to someone else, the research shows.
Of women surveyed who had left marriages, 45 per cent found bank accounts they were unaware of, 50 per cent found spouses had hidden spending from them and 46 per cent found there were more assets than they knew about.
"Women will quite often say they not going to think about investment, it's not for them. On the other side of it, we don't get invested in," says de Bievre, who initially struggled to attract investors so she could grow her business.
The times they are a-changing
But there are encouraging signs of change. There's evidence that women will increasingly become a financial force to be reckoned with. The very fact that women live longer means they are likely to inherit large amounts of baby boomer wealth, and make decisions about what will happen to that money.
Millennial women are predicted to be wealthier, entering permanent relationships later and earning their money through business rather than inheritance.
As women's share of global wealth rises, more than 60 per cent of the UK's wealth is expected to be in the hands of women by 2025. Boston Consulting Group has estimated that by next year women will control US$72 trillion ($113.3t) of private wealth, 32 per cent of all wealth, up from US$51t in 2015.
Sharesies' Brooke Roberts says technology is helping to unlock the world of finance to increasing numbers of women.
"There's more momentum but there's still a long way to go."
Former Telecom chief executive and My Food Bag co-founder Theresa Gattung says that even though business still "feels male", investors are starting to wake up to the fact that women-led businesses are "good bets and often have better returns".
"I think there are signs of Spring here. I think the situation's getting better rather than bleaker."
Corporates are more aware of gender diversity and the wisdom of increasing the number of women on their boards. More women are heading major corporates and more want to be entrepreneurs although Gattung points out executive teams are still male-dominated and if there are women, there're often in marketing or HR.
"They're not usually in the profit-centre from which they pick the next CEO."
Banking Ombudsman Nicola Sladden likes to point out that her role has been held by a woman since the Banking Ombudsman Scheme was created 27 years ago, and that the board is currently all female.
She, too, thinks women need to talk about and understand money, and make sure their finances get "annual health checks".
"I encourage my daughter to budget, save, and value what she already has. I remind her that money provides financial independence, so she should keep a good track of it."
WOMEN AND MONEY SERIES:
• Saturday: For richer, for poorer: How women can increase their wealth
• Sunday: How to make sure you're richer, not poorer
• Monday: How to get on the Rich List