Last week, we talked about the social investing movement and how it’s changed the landscape of money management. It’s easier than ever for everyday investors to leverage a community of others to feel more educated, empowered, and confident.
But when I looked through the results from our survey of 2,000 investors about the power of social investing, I noticed some discouraging takeaways. Women feel much less empowered and confident than men when it comes to investing. They’re also more likely to do it alone.
Community-based investing is a revolution that’s undoubtedly leveling the playing field on Wall Street. And these days, many investors are vocal about building a better system for everyone. But in an effort to be inclusive, are we inadvertently leaving some people behind?
Most people generally like doing things in groups instead of by themselves, according to our research. COVID taught us the importance of social engagement. We all get by with a little help from our friends, right?
But when it comes to investing, more women prefer to fly solo. Just 18% of women said investing is an activity that’s enhanced when doing it with others, compared to 39% of men. 28% of women said they don’t leverage their family or friends for help investing, versus 17% of men.
Interestingly, women also expressed their lack of confidence and knowledge about investing. 21% of women said they feel at least somewhat confident investing on their own, compared to 53% of men. Theoretically, joining a community could help boost confidence and knowledge through important dialogue, yet women are still noticeably more hesitant to join these communities.
It isn’t for lack of interest, either. More than half of female investors we surveyed in March said they control 80% or more of their household’s finances, while 76% said they consider investing to be a part of household finances. Women already control a majority of purchasing power, and they’re gaining wealth share in the US too. Investing can also be a key step toward long-term security. And if we’re being honest with ourselves, we’re all striving for security.
Opening up communities
Ultimately, social investing is a personal preference, and investing itself is a highly personal journey. However, the crux of this issue runs deeper than most think. The financial industry is largely run by — and built for — men. As a result, financial spaces and conversations are more tailored toward what men need.
A good part of us have been taught from birth that money is stereotypically a man’s game. Financial products are still built and marketed largely for men — alpha, performance, gains. The industry is still saturated with people who don’t understand us and the nuances of our lives. And while we’d like to think investing is a team effort now, it’s still viewed as intimidatingly cutthroat and competitive. No wonder we don’t feel comfortable joining investing communities.
At the same time, we’ve come a long way. COVID opened up a broader conversation around money. Many of us women started investing more over the past two years. Talking about salaries and investments became a little more normal. The collective trauma taught us to be more honest with others about what we need. Investing became more accessible than ever. But did it become more welcoming?
To be fair, I think we’re making progress on investing inclusivity. And I’m bullish on the rise of social investing as a way to lift women up in this industry. But for this to be the case, we need to build communities with everybody in mind.
With that, here are three ways to improve inclusivity in your communities:
Be aware. Listen to women. Take note of the struggles they face and the questions they ask on their investing journeys. Ask about what’s not working and think about how you can fix it. Communities can be anything from tone deaf to downright hostile for women — take it from me, a power user on Twitter — and many of us have trouble finding an accepting space to share our feedback.
Be open-minded. Much of finance falls into the trap of dismissing ideas and theories just because they don’t line up with our own goals, needs, and view of the world. In fact, many arguments over markets start because two people are looking at different time horizons. Communities thrive on dialogue between people with different perspectives and experiences. And women and men naturally tend to see investing through different lenses. This is a strength, and we should work to preserve the exchange of knowledge between each other.
Amplify our voices. You can’t be what you can’t see. It’s a powerful idea, and it’s especially important in such a male-dominated field. In our March survey, 53% of female investors said that more female role models who talk about investing could help encourage more women to start investing. The financial industry has work to do here; less than a third of financial advisors are women, according to the Bureau of Labor Statistics. Even if you don’t have a finance career, you can help promote female voices through how you learn about money and investing. Ensure that women are given the attention they deserve in the financial content you consume, even if it’s just sharing with family and friends. Call out any one-sided content or bad behavior.
eToro is taking steps to change this. In November, we launched #InvestWithHer, a female-investors community within the eToro community that provides a supportive environment aiming to encourage females to start investing and grow their financial knowledge. Members can learn from the success stories of their female peers and strengthen their financial knowledge through interactive workshops, fruitful open discussions, live virtual events, and many other free resources.
*Data sourced through Appinio. Can be made available upon request.