Women In Investing: Closing The Gap Or Still Catching Up?

By Dilshad Billimoria

Earlier, the prospect of women directly utilising their capital in other ways apart from gold, fixed deposits or insurance was something that was not taken lightly. Although they were supposed to save money for security, any important economic decision still lay in the hands of the men of the household. Furthermore, cultural perceptions also influenced decision making by considering stock market, mutual funds and high yield investment as issues that are complicated for women to grasp and hence kept domain solely within the purview of men.

Today, that perception is shifting. Women in India have stepped from the life’s background of merely being protectors of wealth to being actual builders of it. They are more involved in the acquisition of shares in the stock market, acquisition of mutual fund as well as other forms of investment. According to NSE, the female market participation representation is at 24% which is a 6.8 times increase since the year 2015 only. Interestingly, a large part of them are still young investors with the age below 40 years.

One of the major factors that has led to this change is increased financial literacy. Women of the modern world today, therefore, do not want to be left in the dark when it comes to investment, risks, and even finances especially in terms of planning. While the previous generations require the male counterparts within the family to help them make wise financial decisions, the current women have research information from the internet, social media information, and various women investment groups.

Workforce participation as well as financial independence has also contributed immensely on the escalation of it. As women have gone to work, obtain higher-paid employment and go into business for themselves and become entrepreneurs, they increase their ability to accumulate money, and therefore create more equality in business and finance.

The COVID-19 pandemic played its part which came as an added advantage, because due to rising instability in finances, women wanted to take charge and moved away from savings which give very little returns.

However, much progress has to be made, since there are still difficulties in implementing the set goals. The latter has it that more women today are taking up investment but majority of them invest in safer products, such as fixed deposits and savings accounts. Research shows that a significant number of women do not invest in equities since they lack funds for reasons such as considering themselves dependant, or leaving work force to raise children or look after sick relatives, and so on.

Societal conditioning also plays a part. Traditionally, women have been made to practice conservatism when it comes to money matters, especially because most tend to prioritise security rather than money accumulation. This, together with poor initial exposure to investing leads to a kind of mentality that is rather hard to shake off.

However, though there is improved awareness, still, many women today are not fully confident about their capability to make investment decisions on their own. Family influence, traditional perceptions, and the limited visibility of women in financial advisory roles continue to hinder progress.

Also, gender pay gap has an influence in the investment behaviour indirectly. Generally, women receive lower disposable incomes than men, thus they act prudently compared to men due to the nature of the circumstances.

The best way to overcome these barriers is to develop a comprehensive approach. Education on money matters should be introduced at an early stage and it should be the responsibility of schools and colleges to ensure women are educated on investment to avoid the negative impacts of poor decision making. And again, peer support and apprenticeship approaches are also very effective—female-controlled investments can strengthen the spirit and share experience.

Financial institutions must continue developing investment products tailored to women’s needs, providing goal-based advisory services and risk-assessment tools that help them understand higher-yield investments at their own pace.

Leadership representation should also be given ample consideration, because it goes hand in hand with variety in organisations. The increase in the number of women in high level positions such as Madhabi Puri Buch as the head of SEBI as the first woman and Finance Minister Nirmala Sitharaman, are some of the examples. There are other working women also as the chiefs in investment organisations and various regulatory bodies setting a trend.

It is evident that despite the constant positive changes, efforts to achieve the dream of gender parity in investing is still a work in progress. With proper financial education, strong institutional backing, and a shift in societal mindset, women won’t just take part in the investment world - they’ll be leading it.

(The author is the founder, managing director, and chief financial planner at Dilzer Consultants Pvt Ltd. Views expressed are personal and do not reflect the official position or policy of Outlook Media Group and/or its employees. The article is for information purpose only; please consult your financial planner/s before investing.)