The gender effect on financial planning

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Gender has been found to have a far-reaching impact on how people behave and plan financially, according to a new white paper from Barclays Wealth.

The research shows that on average women are more risk averse than their male counterparts, and also place less emphasis on the importance of having a will and inheritance plans.

The white paper, Understanding the Female Economy: The Role of Gender in Financial Decision Making and Succession Planning for the Next Generation, is taken from a global survey of more than 2,000 high net worth individuals.

Developed by the Barclays Wealth Female Client Group, the research provides an examination of the differences between wealthy male and female investors’ behaviour, as well as how men and women approach the inheritance planning process.

Key findings uncover how 39 per cent of female investors say they become stressed easily when it comes to their investments, compared to the 29 per cent of men who express the same. Yet, women are also less willing to delegate financial decisions to others. Over a third of men find this strategy useful, compared to 30 per cent of women. When it comes to inheritance planning, women are also less likely to have a will and succession plan in place.

Over 30 per cent of women do not have a will, compared to just 20 per cent of men, the survey found. Meanwhile, 33 per cent of women describe themselves as financial risk takers, compared to 49 per cent of men.

Barbara-Ann King, head of the Female Client Group at Barclays Wealth, who recently co-hosted an event in Leeds, entitled Uncovering the Female Economy, added: “These findings show that, despite women being behind most financial decisions, they are also much less likely to view themselves as knowledgeable about finance and investing.

“Last year, we held a seminar on uncovering the female economy in Leeds, which was attended by a number of local clients and businesswomen, and the themes discussed most during the event were education, empowerment and improving confidence. We aim to help female clients with these matters through connecting them and encouraging them to share experience and advice, in a unique style of female social networking.

“Leeds is a city of great economic growth and entrepreneurial activity, and supporting women in how they engage with their finances, will in turn support the local – and wider – economy.”

She added: “Through our work, it has become clear to us that differences exist in the way men and women engage with their investments and personal finances. As the number of female millionaires continues to accelerate, it is important we reflect on these differences and look at how, as wealth managers, we can offer greater support to both male and female clients. This is one of the key reasons we have produced this white paper, which features groundbreaking research and analysis into these gender distinctions.”

Dr Emily Haisley, a behavioural finance expert at Barclays Wealth, said the research findings must be applied cautiously, explaining: “We have to be very careful not to stereotype men and women; everyone must be looked at as an individual. However, the financial services industry has historically evolved around providing financial services to men, and women are very dissatisfied with this industry as a whole.”