Several businesses and divisions of businesses market themselves as providing targeted investing advice for women. But do women need investing advice that’s different from the advice men receive? It’s a controversial issue. Let’s take a look at some of the arguments for and against financial advice and financial services marketed specifically to women.
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The Case for Targeted Investing Advice for Women
Proponents of offering investing advice geared specifically toward women make several arguments. First, they say that because women in general tend to earn less than men they have a smaller financial margin for error. Women are paid less than men and are also more likely to take breaks in their career to perform caregiving roles. Because women earn lower incomes over the course of their careers they have a smaller margin for error and are more reliant on investment gains if they want to save enough for retirement. Any gains that women’s earnings make on the stock market will be crucially important to their future retirement security because women’s lifetime earnings are lower.
Second, advocates of targeted investing advice for women point to the current state of women’s financial lives – and not just the fact that women’s wages are low. Women are more likely to live in poverty as seniors. And because women live longer than men they need a bigger nest egg to avoid outliving their savings. These facts, some say, mean that there is urgent need for any business that can boost investing rates among women, if only to prevent more women from experiencing poverty as seniors.
Third, some proponents of targeted investing advice for women point to attitudinal and behavioral differences between men and women when it comes to investing and other financial decisions. While debunking old myths about women’s numeracy and risk aversion, these advocates point out that women are statistically more likely to describe themselves as unfamiliar with investing and less likely to invest in stocks. They’re also more aware of the risks involved in investing in stocks, though their investments perform well when they do make them. Advocates of investing advice geared toward women use these data points to argue that women need special investing services.
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The Case Against Targeted Investing Advice for Women
Not everyone sees a need for investing advice and investing services geared toward women’s needs. Opponents of these women-focused services make a few arguments. First, some argue that targeted investing advice geared toward women is a form of condescension at best and sexism at worst, particularly if that advice is packaged with female-coded signifiers like the color pink.
Second, some who are skeptical of the need for gender lens investing worry that women might be overcharged for investing services. They point to the “pink tax,” the name for the problem of women being charged more than men for the same products, e.g. razors. Some critics fear that women could be charged higher fees for using women-specific financial services such as financial advisors and robo-advisors.
Third, there are those who argue that investing advice should be broken down by income bracket, not by gender. They argue that women with six-figure salaries need the same advice as men with six-figure salaries, not women earning minimum wage. Lumping all women together runs the risk of giving women inadequate services and/or ignoring the financial needs of low-income women.
Related Article: 4 Tips for Avoiding the Pink Tax
If you’re deciding between different robo-advisors or financial services firms, it’s a good idea to take multiple factors into account, including the reputation of the business and the costs and fees you would pay. If you also want to opt for a firm that is primarily staffed by women and that actively seeks women as clients, feel free – just make sure you’re getting good value for your money.
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