Investing for women: A lifecycle approach
At Credit Suisse, we believe we can do more by tailoring our advice to female investors, using lifecycle stages as an investment framework.
Women have emerged as key players in the investment world: Their share of wealth has significantly risen over the years to a current level of 42% of total global wealth, taking into account real assets. But are women investors getting the service they need?
“We must strive to pursue a more nuanced approach that takes into account the 'XX factor' of investing.”
Chief Investment Officer, International Wealth Management, and Global Head of Economics & Research, Credit Suisse; Author of the report “Woman to woman. Lifecycle investing for women”
The time is now
In some advanced nations, women are now more highly educated and qualified than many men. More of them are in employment and are earning, and saving, more. It's time for financial institutions to acknowledge the specific needs of women investors and offer meaningful financial advice tailored to their personal situation. But before we talk about our take on investing, we’d like to explore what sets female investors apart.
What makes women investors different?
Women face different challenges when seeking to accumulate wealth. They tend to earn less, take career breaks to raise families, often work part-time, and live longer. Moreover, they invest with a longer-term focus, are more inclined toward investments meeting ESG (environmental, social, and governance) criteria, and take fewer risks along the way. They also hold a larger proportion of their wealth in the form of real estate and other real assets. All these factors end up contributing to a wealth and investment gender gap.
What is lifecycle investing?
How can we reconcile the wealth and investment gender gap and women’s higher longevity when it comes to developing an investment strategy?
Lifecycle investing breaks down investing into distinct life stages and looks at the unique financial needs defining each stage of an investor’s life. In each phase, women can adjust their investment strategy to reflect their financial goals and needs as they evolve over time. This puts their money to work at every stage, leads to fewer missed opportunities, and helps build a more secure financial future.
It’s never too early to start
And it's never too late: Women investors can take action at any age to make their wealth work harder for them. Of course, every woman is different. But investors can always benefit from taking a fresh look at their investing philosophy and rethinking their strategy, whatever their stage of life.
However, it goes without saying that it's better to start sooner rather than later. This applies especially for the Next Generation – women who are not wealth owners yet, but who are expected to inherit wealth and the responsibility this entails in the foreseeable future.