TIME magazine declared women “The Richer Sex.” Is that true? Is all that leaning in working? The fact that Millennial women are graduating college and professional schools at higher rates than Millennial men should bode well for the gender’s comparative earning potential, but a financial gender gap still exists. While the fact that women still make 78 cents for every dollar earned by men is absurd, a new breed of financial brands is making it their goal to narrow the gender gap when it comes to investing those hard-earned cents. As discussed in Mintel Trend ‘The Unfairer Sex,’ women are now coming together to challenge the status quo.
Women are more likely than men to cite a lack of funds as the reason for
not having an investment account
According to Mintel’s US Retirement Planning report, men are much more likely than women to have saved more than $100,000 for retirement and women are significantly more likely to have saved less than $50,000. Additionally, Mintel’s US Investment Trends report found that women were more likely than men to cite a lack of funds as the reason for not having an investment account and more likely than men to say they do not know enough about investing as a reason to not have an investment account. Two issues – lack of funds and lack of education – are the driving forces behind startups such as WorthFM, Ellevest and a soon-to-be-launched money management app called Joy.
WorthFM is a digital investment platform for women and is specially designed to meet the needs of its customers’ unique characteristics and behaviors. One of the features that sets WorthFM apart from other digital investment tools is its MoneyType assessment questionnaire, which identifies how each investor’s individual personality can affect her money habits and behaviors.
Ellevest, another digital investment platform geared specifically towards women, focuses on long-term goals, such as a down payment for a house, and puts women in control of their own financial future. In online advertisements, Ellevest introduces the concept of an Investment Gap and encourages women to learn more through their website. Last month, Ellevest tried to tackle the key issue of education through the launch of a microsite called “The Go-Getter’s Guide to Investing,” with the purpose of empowering, educating and encouraging women on the path to their financial goals.
This new wave of female-focused money management tools is a step in the right direction towards closing the savings and investment gender gap. As more gender-specific offerings bring awareness to the differences between the way men and women invest, traditional banks should take note and consider their ability to pivot towards a more gender-specific strategy.One of the newest femme-financial apps is Joy, a PFM (personal financial management) app based around the concept of making sure everything that someone spends their money on is actually bringing them just that – joy. Through the use of AI coaches, personalized recommendations and even emotional check-ins, Joy is bringing a new level of awareness to the concepts of spending and savings.
Lily Harder is the Vice President of Research for Mintel Comperemedia. Lily specializes in the financial services industry, researching and presenting on the latest industry trends, competitive intelligence insights and newsworthy developments.