Advisors working with female clients and those hoping to attract more female clients may want to consider some of the findings from a new survey on female investors released by Capital Group, the parent company of American Funds.
“American women are a powerful economic force with $11 trillion of assets,” said Heather Lord, senior vice president and head of strategy and innovation at Capital Group, in a statement. “Women are a complex and varied group of investors, and they have a clear vision for their investing goals.”
(Related: Why Women Make Great Investors)
The survey of 1,200 women divided evenly among three generations — millennials, Gen Xers and boomers — found that 9 in 10 are confident they have the knowledge to make good financial investment decisions but only 44% consider themselves an equal partner in the investment decisions of their households.
Moreover, 8 in 10 reported that they experienced being stereotyped as someone who knows little or nothing about investing, makes no money or less money than their partner, isn’t the financial decision maker in the household or is more focused on household expenses.
The survey also compared investment preferences between women and men. While close to one-third of women (30%) and men (33%) preferred a mutual fund with a track record of beating the stock market over time, many more women than men viewed social responsibility as a key variable when choosing companies for their portfolios.
“More than men, women want to invest in companies that are not only financially successful but also deliver economic and social benefits,” said Lord.
Eighty-four percent of women, for example, said it was important for the companies they invest in to promote the health and wellness of consumers and employees vs. 70% of men. Even bigger differentials related to investments in disadvantaged communities and in the roles women play in corporate management and on corporate boards.
Seventy-four percent of women want the companies in their portfolios to help disadvantaged communities, compared with 58% of men, and 73% of women favor companies that have women in senior management or on the board versus 51% of men.
Almost two-thirds of respondents reported having a high degree of economic power as a consumer while roughly 50% said the same about their economic power as homebuyers and investors. It was the workplace where women felt the least powerful. Only about one-third gave themselves a high rating for their power as wage earners in the workplace.
As for their investing preferences, 45% of women surveyed listed beating the stock market as their top priority while 39% said it was growing their investments in line with the market. About half of baby boomers and Gen Xers fixed on outperforming the market while only 35% of millennials did, which may indicate a more realistic approach.
(Related: The Unique Retirement Challenges of Women)
All three generations of women surveyed were concerned about not having enough money saved for retirement, but Gen Xers were the most worried — 66% said this worry kept them up at night versus 51% of boomers and 57% of millennials.
Millennials had the most confidence in their investment decisions, perhaps because 63% reported that they started investing in their 20s. Even so, roughly one-third of millennials were concerned about paying off loans and paying for their children’s education, while one-quarter were concerned about taking care of aging parents. “Millennial women are the most family-focused generation,” according to the survey.
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