Women in Financial Services Blog

Maria Zdravkova - The Gender Investment Gap

Maria Zdravkova - The Gender Investment Gap

Katie.Dix / 17 Jun 2020

E2W member and Alpha Challenger, Maria Zdravkova is a multi-asset portfolio management specialist with 8 years of experience. She has a Master in Advanced Finance. Maria is passionate about seeing women take control over their finances and especially participating in capital markets, that’s why she does workshops on Personal Finance topics for women.

Maria led our virtual coffee break on the 17th of June around the subject of the Gender Investment Gap and has kindly produced a blog article below. 

How I ‘met’ the Gender Investment Gap

The Gender Investment gap is different from the other gaps we often discuss and it’s very personal to me. I experienced it before I knew about its existence. A few years ago my professional life was all about portfolio management - benchmarks, weights, outperforming and so on. In contrast, my personal finance situation was rather messy. As I felt really stuck in certain aspects of my life, I realized organizing my money could give me some freedom. So I did. I had the knowledge and discipline and it wasn’t really a challenge. Fast forward a couple months, debt free with emergency fund in place, I’m looking to start investing. And what did I do? What many of us do when we’re about to do something new – went to chat with my friends and ask for advice. I started with the closest ones, they were women working in banking as risk managers and lawyers. Surprising to me, I didn’t get anything particularly useful and the uncomfortable conversations died quickly. Then I expanded my ‘mini research’ to male friends and colleagues. This led to bits of advice (not necessarily groundbreaking all the time), but it did open a new kind of conversations with these guys that become regular updates on the topic and exchange of ideas.

This made me realize two things – while I thought I was the exception among my girlfriends, not being financially responsible and investing, I turned out to be closer to the norm. And second – the women around me felt uncomfortable discussing money. I found this disturbing and I’ll tell you why.

The price of not understanding money

Do you know the number one reason for divorce worldwide? Do you know the main reason people remain in abusive relationships and toxic work environments? Money. We cannot afford to be uncomfortable talking about it and not knowing how it works. The price is too high. My desire to correct this imbalance drove me to start organizing personal finance workshops for women and while researching my topics I found out my experience was a known issue and had a name – the Gender Investment Gap.

I can pour statistics over you and tell you that men hold double the investment assets in the UK that women do. I can tell you that women end up with about 1mm GBP less than men at retirement. But I’d rather tell you why this gap is a different one – it’s because we can act and close it ourselves. It doesn’t depend on governments and corporations. But on our own actions.

Media is not working for us either – growing up with Sex and the City I remember the girls having 1 conversation about investments over 6 seasons – just enough to find out that the main character had none. She was about to lose her home at some point. Just saying. Recently I watched a TV show based on Four Weddings and a Funeral where a young professional woman living in a fancy house in Notting Hill had a falling out with her parents and told her friend – ‘I don’t know what to do now, my father always took care of my finances and I assumed after him my husband will do.’ It’s really not something I expected to hear in this day and age.

How do we close the gap?

It is fair to say that Investment Managers have been slow to adjust to the needs of female investors and offer respective products. We have to acknowledge that women have different investment objectives and risk appetites. And the fact that only 10% of financial advisors are female doesn’t help to the many women who feel misunderstood by Wealth Managers. But all of these do not release us from our own responsibility to educate ourselves about financial products and investing. It doesn’t matter how suitable the new products will be to our goals, if we are not willing to learn about them and take risks. For example – women are more interested in making positive impact with their investments and help their communities, hence ESG is seen as something that would appeal highly to female investors and meet their requirements. But to find out about it, we need to express interest first. There are too many funds to choose from, is not a good reason to put off investing. It’s time to go outside of that comfort zone.

Take away

In conclusion, I want to encourage you to talk openly to your friends outside of our profession. You may be surprised how interested they are and how much they want to learn from someone who is not going to judge them or try to sell them something. We can close the gender investment gap by ourselves.

Albert Einstein called compound interest the 8th wonder of the world. Please don’t miss out on it!

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