Lauren Jackson

Women are increasingly aware of the importance of managing their financial wellbeing and taking steps to take control of their finances.  However, they continue to have less confidence in their financial knowledge and greater concerns about their financial future than men, according to a recent study by Fidelity International. 

The Fidelity’s Next Generation research surveyed* over 1000 Australian consumers aged 18 to 59 years old to understand their evolving financial needs and behaviours. It found that women are notably less likely to believe they will achieve their long-term financial goals, with 13 per cent of women feeling confident about this compared to 22 per cent of men.  It also found that just 18 per cent of women are very confident in their ability to manage their day-to-day finances as well as their big picture finances, compared to 28 per cent on men.

It is also notable that there is a significant gap in the confidence men have in their ability to evaluate investment opportunities compared to women (72 per cent of men are confident or very confident, compared to 48 per cent of women). While this confidence may not necessarily translate into investment success, it is indicative of the bigger issue around women’s confidence in their financial abilities, and therefore the steps that they take to manage their finances.

Lauren Jackson, head of wholesale, Australia, Fidelity International, says it is concerning that women continue to feel they lack the knowledge or ability to take control of their financial situation.

“Women recognise how important it is to be financially aware and to manage their financial situation. We are seeing people becoming more vocal about addressing issues such as longevity, and how women can contribute more to their superannuation. This is positive progress.

 “However, what we should tackle next is the gap in the confidence and faith that women have about their own ability to manage their financial situation when compared to men, as this will have a knock-on effect on the decisions that women make about investments and managing money.”

When it comes to strategies to help them achieve their financial goals, almost one-in-four women (24 per cent) say they have never invested at all, compared to 10 per cent of men. Furthermore, women are less likely to invest in shares or bonds (22 per cent compared to 31 per cent of men) or to consolidate debt (15 per cent compared to 24 per cent). They are also less likely to consider diversification in their investments, with 18 per cent saying they don’t consider adequate diversification at all, compared to 4 per cent of men.

Just 16 per cent of female respondents said they have seen a financial adviser, compared to 22 per cent of men. This could be due to the influence of money worries, with over half of the women surveyed saying they are concerned about the cost of seeing an adviser (55 per cent of women compared to 46 per cent of men) as well as the fees and charges on investments (61 per cent of women compared to 55 per cent of men).

“The impact of this discrepancy is real, particularly in the current economic environment,” Ms Jackson says.

“Cost-of-living pressures are being felt very keenly by women, with three quarters of women saying they have reduced spending on non-essentials compared to 60 per cent of men.  This could create another barrier to their willingness to invest.

“Financial institutions have a role to play to help support women in achieving financial equality and helping to shift perceptions.  For example, Fidelity’s ‘Women and Wealth’ initiative in Australia focuses on connecting financial expertise with women inside and outside of the financial services industry, in particular, the next generation of female investors. This includes providing information specifically designed for female investors as well as organising events and forums that give women the opportunity to hear from those in similar situations.

“This is particularly important as our research found that women are less likely to seek out professional financial advice than men.”

Women are also worried about finding someone they can trust (43 per cent compared to 34 per cent of men) or who can speak to their level of understanding (women: 25 per cent; men: 19 per cent). Interestingly, women are less likely to turn to social media ‘finfluencers’ for advice, with just over one-quarter of women (28 per cent) saying they use ‘finfluencers’ as a source of information about finances compared to over one-third (36 per cent) of men.

Instead, women are more likely to turn to financial news websites and publications (34 per cent) and friends and family (33 per cent).  Men also rank financial news websites highly (40 per cent) but their second choice is investment apps (36 per cent).

“Our report highlighted the increasing interest among younger generations in seeking financial advice, with 1 in 2 ‘Gen Z’ respondents finding financial advice appealing or very appealing. This is a positive sign for the future as we hope to see this trend help drive more females toward advice, thus increasing their confidence in making investment decisions,” says Ms Jackson.

“It is clear that more needs to be done to improve financial understanding amongst all Australians but in particular women, in light of their longer lifespans and lower superannuation balances.

“At Fidelity, we continue to look at the role we can play in supporting and empowering current and future female investors, through education and improving financial literacy, information and advice tailored to the needs of women, and providing leadership.”

Read the research.

 —————

Notes
* Fidelity International leveraged a large quantitative research study undertaken by independent research firm MYMAVINS to compile the Next Generation report.
The research involved an online survey of 1,011 next generation Australian consumers 18 to 59 years old, with fieldwork undertaken in August 2024. Respondents included adult Generation Z aged 18 to 28 (n=174), Generation Y or Millennials, aged 29 to 43 (n=443), and Generation X aged 44 to 59 (n=394). There were 111 respondents with an active relationship with a financial planner.

The post Women increasingly aware of importance of financial well-being but confidence continues to lag appeared first on AdviserVoice.