The Shecession Cometh: Women and Investing in a Pandemic

In the shecession, Plan sponsors may want to think about how to encourage their female employees who may feel less than confident about their retirement prospects. That could include examining how to increase financial education, like Ellevest, or by noting the studies we discussed that show women’s strengths in investing, like patience, research and diversification.

We’ve covered financial feminism and topics related to whether the conventional wisdom concerning women and investing still holds before on this blog. But the days of pontificating and pondering may be over. As reported in The New York Times,[1] the unemployment numbers are literally off the charts. And buried in those numbers is that the rate of unemployment for women in the workforce is higher than that of men.  As the NYT said “Women accounted for 55 percent of the 20.5 million jobs lost in April, according to the Bureau of Labor Statistics, raising the unemployment rate for adult women to about 15 percent from 3.1 percent in February. In comparison, the unemployment rate for adult men was 13 percent.” One reason for the disparity may be the kinds of jobs women were holding before the stay at home orders began: hospitality and child care were both the hardest hit by the change to the economy and also had a higher than average percentage of female workers.  Employees that relied on income from family members who are now unemployed may feel lacking in confidence just as that is most needed.

Given the tough statistics and the new reality, it may be helpful to revisit the issues that women face in investing. Those issues may help female employees have perspective that can increase their sense of resilience. In past articles we discussed the conventional wisdom of women and investing. “For years, Wall Street analysts held the common wisdom that women invested too conservatively, starting investing too late, and routinely saved too little.”[2]  In fact, studies showed that women actually do better in rough financial markets than men.  While past performance isn’t comparable to the current financial climate, because it is so unprecedented, it’s worth noting how women outperform men. That knowledge may help increase confidence in the women in your workforce who are worried about the current financial situation.  Studies show that women research investments more deeply, are more likely to diversify their asset mix and trade less frequently than men. In fact, they trade almost 50% less than men. Women are less emotional about market swings and less likely to engage in panic selling or buying.

But the needs of women in investing may have less to do with patience, savvy or a deep love of research. It may have to do with competing financial strains on women’s income. Many women state that they are the family members who must help an elderly relative, handle childcare or take time off of full time work to raise children.

Additionally, women seek out advice more than their male counterparts in investing. Studies have shown that women are more likely than men to ask questions of a financial adviser (26% to 20%) and among women, 39% currently use a financial adviser, compared with 35% of men.

In the past, we focused on the rise of Ellevest, an investing platform that is targeted at women. It focused first on roboinvesting and worked on eliminating barriers to entry, such as lowering the amount needed to start investing.  Ellevest also focused on boosting the confidence of it’s investors through online education.  Ellevest’s focus on financial education to empower its clients has paid off, not only with its successful rounds of capital raising, but in its continuing growth in client base.

In the shecession, Plan sponsors may want to think about how to encourage their female employees who may feel less than confident about their retirement prospects. That could include examining how to increase financial education, like Ellevest, or by noting the studies we discussed that show women’s strengths in investing.


[1] https://www.nytimes.com/2020/05/09/us/unemployment-coronavirus-women.html
[2] https://www.bcgbenefits.com/blog/targeting-female-investors

These articles are prepared for general purposes and are not intended to provide advice or encourage specific behavior. Before taking any action, Advisors and Plan Sponsors should consult with their compliance, finance and legal teams.

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