Why Women Should Take Control of Their Wealth and Investments

Financial Planners


When Patricia T. sought financial advice, she was recommended not once, but many times, to expensive, high-fee, off-the-shelf investment-linked life insurance products.

The Dubai-based marketing professional, who declined to give her full name for privacy reasons, asked about her personal situation and life goals among the few advisers she has consulted so far. was only one of several advisers.

“My financial nature is risk-averse, so when I do business with investment advisors, I want them to work from there. I want to, but so far no one has provided it,” she says. The National.

Her story may be familiar to many women in the UAE and elsewhere.

Globally, male investors outnumber female investors by 3 to 1. According to data from the international comparison website BrokerChooser.com, 76% of her investors in 123 markets worldwide are male, the rest female.

These figures also apply to the UAE, although other GCC countries report similar breakdowns. In Saudi Arabia, 86 percent of investors are men (versus just 14 percent women).

Lebanon leads the region with 28% of female investors. The country closest to gender parity in investment is the Philippines (56% male, 44% female).

The gap is so great that women accumulate only 74 percent of the wealth men have at retirement age, according to a 2022 World Economic Forum study.

“There is something of an investment gap between men and women. It is partly cultural and partly related to traditional gender roles,” said Dubai’s Holborn Asset Kellen Bobker, an independent financial advisor and senior partner, said.

“The world of financial services is still a fairly masculine world, with the majority of advisors being men and a lot of jargon being used. There are many stories of people being sheltered by their advisors.”

Traditionally men have managed the finances, but Bobker says everyone should be aware of their financial situation, even if someone else is in control.

“Women are often at least as good as or even better than men when it comes to managing money, so don’t be discouraged by a male-dominated industry,” she says.

Investment firms may indeed be missing a trick. Women’s wealth is estimated at $81 trillion to $93 trillion this year, according to Boston Consulting Group.

According to BCG, women’s wealth in the Middle East is expected to grow at an average annual rate of 9% from $786 billion in 2020 to $1.1 trillion this year.

More than 40 percent of women’s wealth in the region is concentrated in the UAE and Saudi Arabia, where women controlled $102 billion and $224 billion worth of assets respectively as of 2019.

However, in terms of percentages, women in half of the world’s population will only hold about one-third of the wealth in 2020, while 2019 Ipsos data show that women make up about one-third of household purchasing decisions. This is despite the fact that 90% of them are run by women in the community.

financial services gap

Financial service providers, through both advice and education, have a key role to play in closing the investment gender gap.

Hannah Greenwood, Certified Financial Planner and Senior Executive Director of Finsbury Wealth, is one of the few female financial advisors looking to support female investors in the UAE.

In 2021, the United Arab Emirates-based wealth manager launched Unity Wealth, a division aimed at supporting women’s financial planning and wealth needs.

The 10 richest women in the world in 2023 — in photos

“Unity Wealth was founded by women for women and aims to empower women to make informed and confident decisions about all aspects of their finances, regardless of their circumstances.” Ms Greenwood says

Women approach investing differently than men, she added.

“Women are typically more risk averse than men. When it comes to financial planning, women are particularly focused on step one of the process: protecting their families,” she says.

While ensuring that families are protected in the event of death or illness is an important component of comprehensive financial planning, women also need to consider other key aspects such as savings and subsequent investments. That’s where she comes in, says Greenwood.

Unity has also helped female clients going through major life changes, such as divorce, bereavement of a partner or family member, she says.

Unity Wealth is part of an expanding global trend in financial advisory focused on women.

In the United States, Elvest, Inc., founded by former Wall Street executive Sally Krochek, offers financial planning and coaching services for women.

Last April, Elvest raised $53 million in Series B funding. Women and women-led corporations were key participants.

Similar companies exist in the UK, EU and India.

Comprehensive investment environment

Meanwhile, some established players are working to build inclusivity into their overall investment landscape.

Last year, US-based investment management firm BlackRock launched a number of exemplary model portfolios for women to help registered financial advisors better support their female clients.

Multi-asset portfolios incorporate three specific points that differentiate male and female investors: life expectancy, income inequality, and employment inequality.

Globally, women live an average of three years longer than men, according to the World Bank, with an average life expectancy of 75 years in 2020 compared to 72 years for men.

According to the United Nations, women’s lifetime earnings are about 20 percent lower than men’s. They also spend 1.2 years away from work caring for children and elderly relatives, according to BCG data.

BlackRock’s model portfolio aims to factor in these challenges so that women can feel comfortable retiring despite these gender gaps.

In the UAE, Islamic law-compliant savings platform National Bonds last month held a seminar on the importance of investing specifically with a focus on women, in partnership with regional NGO Arab Women’s Affairs.

“Investment is critical to economic development, and women in particular play a key role in the progress and prosperity of their communities,” said Rehab Ruta, deputy group chief executive of National Bond.

“Providing them with financial education and the means to invest is essential not only to the financial security of the country, but also to their financial security.”

Quote

The world of financial services is still a fairly masculine world, with the majority of advisors being men and a lot of jargon being used.

Keren Bobker, Senior Partner, Holborn Assets

“Our goal is to equip women with the knowledge and tools they need to close the investment gap between men and women, inspiring them to dream big and reach new heights.”

About 50% of government bond sukuk holders are women, and the company expects that number to grow rapidly.

The role of education and personalization

Studies show that women feel less confident about investing than men. But that could be because they’re more cautious about taking risks, Greenwood says.

“Education is part of our role as financial planners. We need to help our clients understand markets, opportunities, relevant procedures, financial goals and objectives,” she said. say.

Financial education is a key component for start-ups like UAE-based RuDo Wealth.

Masuma Elahi, co-founder of events on personal financial management in the United Arab Emirates, said: All they need is the right information to keep the flow going. ”

This app offers a kind of DIY approach that many advisors fail to offer.

The United Arab Emirates-based fintech company hopes to launch in the near future and help women and men build wealth in a sustainable way by automating savings and investments through a micro-investment app. I believe.

Updated: May 12, 2023 at 6:02 PM



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