Research reveals the ‘bigger issue’: women’s financial confidence

New research from Fidelity International has suggested that the lack of confidence among women in their financial knowledge and abilities is connected to the ‘bigger issue’ of managing financial wellbeing.

A survey of 1,011 Australians aged 18 to 59, commissioned by the fund manager and conducted by independent firm, MYMAVINS, formed the basis of the Next Generation report, which found that women felt less confident (13 per cent) about achieving their long-term financial goals than men (22 per cent). Similarly, only 18 per cent of women respondents felt very confident in their ability to manage their finances, compared to 28 per cent of men.

The report also highlighted a gender-driven gap in the confidence women have in their assessment of investment opportunities (48 per cent) compared to men (72 per cent), with just under one-quarter of women respondents (24 per cent) indicating their had never invested at all. Women were less likely than men to invest in shares or bonds (22 per cent compared to 31 per cent), consolidate debt (15 per cent versus 24 per cent) and move to diversify their investments (82 per cent versus 96 per cent).

“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,” Lauren Jackson, Head of Wholesale, Australia at Fidelity International, said.

“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.

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

The survey found 16 per cent of women had engaged a financial adviser (compared to 22 per cent of men), with 55 per cent of women concerned about the costs (compared to 46 per cent of men), as well as fees and charges on investments (61 per cent of women versus 55 per cent of men).

Other concerns that may stop women from engaging a financial adviser highlighted by women including finding someone trustworthy (43 per cent compared to 34 per cent of men) or finding someone who can “speak to their level of understanding” (25 per cent versus 19 per cent of men).

In terms of accessing other sources of financial advice, women were more likely to turn to financial news sites (34 per cent) and friends and family (33 per cent) than ‘finfluencers’ on social media (28 per cent). Men were more likely to use ‘finfluencers’ as a source of information (36 per cent), as well as investment apps (also 36 per cent) and financial news sites (40 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,” Jackson said.

“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.”