Women are signing up to investment platforms at faster rates than men, as investors flock to trading to take advantage of market volatility and lower prices.
Investors have registered on platforms in record numbers since March and trading volumes have remained heightened since the market sell-off earlier this year. Women are under-represented on investment platforms, but as new and younger customers sign up, they are making up a larger chunk of that base.
EToro, a DIY trading platform, reported a 366 per cent rise in the number of new women investors since the beginning of the year, compared with a 248 per cent increase for men.
Nutmeg, a UK online wealth manager, said customer sign-ups are up nearly one-third in 2020. Women ordinarily make up 36 per cent of its investors, but this year the female share of new customers rose to 40 per cent.
Bux, a European investment platform, said female customers signing up to its share trading app BuxZero grew six-fold over the year to date, compared with fourfold growth for men.
Nannette Hechler-Fayd’herbe, global head of economics and research at Credit Suisse, noted in a recent report that women’s emphasis on financial security can lead them to hold excess cash and lower returns later in life. Though women own 40 per cent of the world’s wealth in real terms, they represent a far lower proportion of those engaged with the stock market or wealth managers.
Customers of retail investment platforms and wealth management firms are typically heavily skewed towards men — on eToro the approximate breakdown is 85 male to 15 per cent female. Some 70 per cent of Interactive Investor’s customers are men, and the customer base of Hargreaves Lansdown, the UK’s largest investment platform, is two-thirds male.
Female investors are unfairly stereotyped as more risk averse and uninformed than men, advisers say. In reality, their financial strategies tend to reflect their goals — and a desire to keep cash safe, prioritising long-term financial stability. Women may be more likely to hold cash than men but as interest rates on cash savings and yields on lower-risk investments such as bonds have declined, investment has become more attractive, with more women seeing it as imperative to keep up with inflation.
“To see more women investing is incredibly positive,” said Kat Mann, savings and investment specialist at Nutmeg. “At a time when savings accounts and interests rates offer incredibly poor value, holding more money than is needed in cash could be having a long-term damaging effect on finances.”
The lockdown period has reduced spending, increased savings and expanded the amount of time women have to think about financial planning.
“Women are interested in investing, they’re just short on time, especially mothers,” said Becky O’Connor, head of pensions and savings at Interactive Investor. “They’re time poor, so rarely does investing make the top of the priority list.”
Another catalyst has been the emergence of low-cost, user- friendly investment platforms challenging the older investment providers, which traditionally catered to a heavily male client base.
The new providers appeal to millennials and Gen Z customers; they account for most of eToro’s sign-ups this year, while more than half of new customers at Barclays Smart Investor this year were under 44. New accounts opened by women in that group grew at a faster rate than men.
These new platforms have created a business out of making investment simpler and quicker, stripping out jargon and putting a priority on ease of use. “The issue of convenience is really important,” said Ms O’Connor.
Ms Hechler-Fayd’herbe said: “Women are really looking for advice that is extremely practical . . . They like to go straight to the point.”