Women gaining ground with their finances, study shows

Women are making financial gains on many fronts and modeling healthy money behaviors, according to a survey from Fidelity Investments.

More than half of women who invest in the market say that they typically stay the course on their investments when the market experiences a dip, compared to 43% of men.

Fidelity said that it added 48% more new women customers in 2023 compared to 2019. And younger women are leading the way, as the firm added a formidable 99% more new Gen Z women customers and 48% more new millennial women in the same period.

The number of women preparing for the long term and saving for retirement is slowly but steadily on the rise as well – with 68% of women saving for retirement in 2023, compared to 66% in 2019, according to the study.

Why women are making these moves

Three factors are driving women to make these positive moves, explained Lorna Kapusta, head of women and engagement at Fidelity:

The pandemic: the pandemic was certainly a catalyst for taking time to care about what's important, and for many women, that meant getting more involved in their finances. “We specifically looked at growth in our customer base since 2019 to capture the swell we’ve seen post-pandemic,” she said.

The financial-services industry is changing for the better. “Today,” Kapusta added, “you can invest with as little as $1 and, even better, it’s free to get started. New tools like robo advisors have made it easier than ever for women to take action, she said. In addition, time is a precious commodity these days; so, having a hands-off option like that is great for women who often juggle multiple responsibilities. Women have historically felt the financial industry was not built for them, and it's encouraging to see that shifting, as firms like Fidelity take the steps to become more accessible to all.”

There has been a significant cultural shift. “Women are talking about money more than ever before, and we’re really starting to see the taboo around money go away,” Kapusta said. “Our research has shown that women want to support each other when it comes to careers and finances; so, it’s quickly becoming a regular part of our vernacular. We’ve seen this first-hand in the growth of our Women Talk Money community, which has doubled in size over the past year. We’re creating meaningful connections through those discussions and helping to break down financial barriers. We know there’s still more work to be done, but it feels like the momentum is moving in a really positive direction.”

More room for improvement

However, there is still more work to be done, as Kapusta pointed out. For example, according to the survey, the percentage of women who are feeling knowledgeable about important financial topics like how to invest their savings to prepare for retirement (52%), when to start taking Social Security to get the highest benefit (59%), and how to pay for health-care expenses in retirement (56%) has stayed relatively flat since 2019. Perhaps, not surprisingly, the top five financial stressors women face today are largely tied to these factors, all of which impact women disproportionately compared to men.

The top five stressors are:

• Thinking I should be doing more with my finances than I am (40%)
• Saving enough to retire (39%)
• Paying off debt (37%)
• Tackling the cost of health care in retirement (29%)
• Knowing how to invest my savings to reach my financial goals (24%)

Areas that often make financial planning different for women
To help reduce these stressors and make the most of their money, it’s important for women to consider the factors that can often make financial planning different for them, especially in these three key areas, according to the survey:

• Caregiving: While more women have been returning to the workforce after stepping away during the pandemic, women continue to shoulder most caregiving duties, which can impact their mental health, career trajectory, and savings potential. In fact, almost 1 in 4 women caregivers (22%) currently report not saving as much for retirement due to caregiving responsibilities (including 24% of Millennial women and 28% of Gen X women). Women are also more likely to say they had to leave their job or retire early due to their caregiving duties, and 10% say they’re not able to invest outside of retirement.
• Extended retirement years: Women tend to live longer than men; so, their dollars need to stretch to cover a longer retirement. In recent years, more women are feeling on track with their retirement savings since 2019, up 5%, while fewer men feel on track since 2019, down 12%. Boomer women are feeling the most confident since 2019, up 39%, which is encouraging considering they are approaching their retirement years. There’s still more work to be done despite this progress, as nearly 6-in-10 women overall still don’t think they’re on track with retirement savings. This points to a lack of confidence in their financial plans.
• Health care costs: Health care is another financial factor that women need to plan for, given their longer lifespans.

Serving female clients

So, what are some of the steps advisors can take to attract more female customers to their financial practices? There’s definitely room for improvement here, said Kapusta. “We recently ran a survey of investors and found meaningful gaps between how women and men feel about both their financial lives and their financial advisors— with women reporting less satisfaction and knowledge. We know women are looking for advisors who truly understand and listen to them – when they don’t have that, they won’t hesitate to find someone else.”

The good news, Kapusta added, is that there are specific steps advisors can take to better serve women, such as conducting a relationship audit and communicating with intention, and focusing on the “Three E’s.”

"A relationship audit is a great way to assess the strength of your relationships with clients and determine their preferred communication methods," Kapusta explained. “One key step here is making sure you’re communicating with both spouses/partners in dual households – that goes a long way.”

Communicating with intention means being inclusive, judgement-free, and bringing more intimacy to build trust. “To do this,” Kapusta said, “you also need to be constantly listening to your clients to understand what their goals are and who is important to them. All of your recommendations should be tailored to that.”

Finally, Kapusta said, advisors should focus on the “Three E’s”:

• Find ways to engage more on relevant topics (and use their communication preferences).
• Educate more to help close the gender gaps related to investment knowledge.
• Elevate your offering to better meet the needs of women, who, as is shown in the Fidelity study, generally face multiple factors that increase their needs in this area (longevity, caregiving impacts, higher health care costs, etc.).

The research presents findings of an online survey among a sample of 2,020 adults 18+, including 994 men and 1,002 women. Fielding for this survey was completed between July 21-26, 2023, by Big Village, which is not affiliated with Fidelity Investments.

Ayo Mseka has more than 30 years of experience reporting on the financial services industry. She formerly served as editor-in-chief of NAIFA’s Advisor Today magazine. Contact her at [email protected]. 

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