What are the cultural & psychological barriers facing female investors?

Iona Bain

(Picture: Scottish financial adviser Diane Carr)

Women may be worse off than men over the course of their lives as a host of psychological and cultural barriers prevent them from becoming shrewd investors.

That’s the verdict of new research from Open University, which follows industry reports suggesting women are lagging behind in money management and stand to suffer as a result.

The university has revealed a “personal investment gender gap” after assessing the take-up for its latest free course on handling portfolios and pensions. Only 40 per cent of students on its Managing My Investments course are female, a big drop-off from the high percentage of women (64 per cent) who signed up for Managing My Money, a previous course on household finances

Professor Sharon Collard from the university suggested that women may be less interested, engaged and confident when it came to investing. She added: “This is worrying, given the important financial decisions that women and men are required to make nowadays that will impact significantly on their financial health (and potentially that of their family) in the longer-term.”

Separate research has confirmed that girls are taught less about investing than boys. iFs University College found that only a quarter of female pupils say they receive financial education compared to 36 per cent of male pupils. The data showed that 76 per cent girls leaving school at 16 to go into work or higher education will do so without learning about money at all.

Alison Pask, vice principal of iFs University College, said: “With female students making up the majority of university entrants each year it is the height of irresponsibility that so many are being sent off into the next stage of their education with next to no practical financial education.”

Lessons in money are compulsory in Scotland but often delivered through subjects such as economics, maths and business management. A Scottish Government review in 2013 admitted these subjects were “dominated by boys” and referred to evidence submitted by the charity Engender, which stated that many young women are still encouraged to prioritise “female friendly subjects” such as art and administration.

Professor Collard argued that a more cautious outlook among women could also be a thorn in their side. She said: “There is a good deal of evidence from the UK and the US that shows women to be more risk averse than men in their attitudes and behaviours towards investment decisions. Indeed, psychological studies suggest this reflects a lower tolerance to risk among women generally.

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