A third of women still regard finance as a man’s world and nearly two thirds of women identify with the statement that they are not financially savvy, according to recent research from The WealthiHer Network. In this inaugural episode of Money, She Talked, a podcast from the female financial experts at Tilney, Tamara Gillan, the inspirational founder of The WealthiHer Network joins Tilney’s Business Development Manager Eleanor Wotherspoon and Head of Financial Planning in the North West Ann-Marie Atkins to discuss why this is and what can be done to change it.
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The following is a transcript of the podcast which has been edited for clarity.
It is important to remember that investments fluctuate in value and you may not get back the amount invested. Nothing in this article is intended to constitute advice or a recommendation, and you should not take any investment decision based on its content. The opinions expressed may change without notice. If you are unsure about the suitability of an investment, or if you need advice on your specific requirements, you should seek professional financial advice.
Q1: WealthiHer’s research about women and finance: Tamara discusses the findings
WealthiHer’s research highlights that women are more likely to have savings, ISAs and life insurance products. Men are far more likely to have investments such as stocks and shares that they either manage themselves or have managed for them. And a third of women still perceive investing to be a man's world, which is slightly disappointing and depressing. Tamara, can you tell us how you conducted this research and whether these findings reflected what you expected to see?
We, at WealthiHer, and our partners like Tilney who supported us in this research, believe that you cannot change what you do not understand. And so our approach in terms of how we undertook the research was to say: how do we do this in the most comprehensive way? So we did surveys and interviews with over two and a half thousands men and women. We interviewed and surveyed people in mainland China, Hong Kong, Singapore and the UK. And in the UK, as this is a follow-up study, we obviously had the opportunity to look at how things have changed from the beginning of this year and last year, so 2020 and 2019, so what's been the shift in the way that women are perceived by the financial industry, understanding them, catering to them, what their needs are...
In February of last year we were able to look at what's changed, but then we also interviewed women one-to-one throughout the summer, when people were starting to understand the impacts of Covid-19 on life, on business, on the way that they behaved or on their financial needs: all the changes that they were forced to make. And then we also did another dip in August and what we have found – it really mirrors what we saw in 2019 – is that 72% of women still do not feel understood by the financial services industry. There are specific reasons for that: they don't feel that they're necessarily always understood or talked to in a way that caters to where they are in their investing journey. They also want to see more women in the industry. And in fact, as I know from Tilney, there are great, outstanding women in the industry.
So some of that was perception versus reality; we remained firm that we need to drive change because what we found clearly is that Covid-19 has had a more disproportionately negative impact on women. And that's in savings, but also contributions to pensions, which were already a third of men's. Women's jobs have been more hit. So some of it we expected and some of what we found, that disproportionate impact on women, has galvanised us and our partners to do more for women as we face 2021.
Picking up on the Covid-19 part, do you reckon that the Covid-19 crisis has changed women's priorities or attitudes when it comes to investing?
62% of women and 60% of men have said that they feel more financially cautious as a result of Covid-19. We've seen that for women: their priorities have changed, so thinking about what the purpose of their wealth is has changed as a result. There has been a saving behaviour – not spending as much money. And then we've also seen that women, particularly those that have had their jobs compromised, in the UK are 1.5 times more likely to have either quit or lost their jobs through Covid-19, and that has had a negative impact on pension contributions. So decisions have been made: not by all women, but some women did.
We've also seen that women had a lot less panic around Covid-19 in the market, potentially because they've got a longer-term investment approach. So they didn’t have a knee-jerk reaction, but more of a considered approach. That's feedback we've had from financial planners and investment managers and that's been a really interesting dynamic that we're seeking to understand more of.
Q2: Ann-Marie shares her insights about financial priorities and attitude to risk
To bring it back to the initial findings from the research, a third of women still regard finance as a man's world and two thirds identified with the statement ‘we're not financially savvy’. So, Ann-Marie, you're a financial planner that spends all day helping people make good financial decisions; do you see these findings reflected in your conversations with female clients?
Yes I see this daily, not only with the female clients that I work with, but also with colleagues and my various friendship circles. What I see and now clearly understand is that many women look at their priorities differently. In their own mind, they believe they're doing the right thing. And I don’t like to use the word worry. And a lot of those tend to be probably more cautious, so I think generally we like to make informed decisions and we often don't like to take chances, we stick to our beliefs. What we've found, or what I've seen, is that we're more likely as females to place a greater emphasis on helping others and making sure that if you've got children, they go first. And if we don't have children, a lot of ladies that I've seen either will hold on to higher cash than they need or will spend more. We tend to follow a very traditional route of priorities: thinking about mortgage or insuring against the worst, having a backup fund or, in my own little world, I like to call this ‘my secret little stash’ that I don't tell my husband about. And we tend to all pay the standard minimums into workplace pensions or pensions.
I also see quite a lot of women that actually work in the financial industry and they still don't understand how best to plan, even when they've got some underlying knowledge. So it's not easy to change a lot of these pre-existing, already built views. But generally, what I’ve found is that by having a conversation about those things we can help women think differently about how they can benefit themselves in the long term.
The research found very similar things: it said that women aren't risk-averse, they're risk-aware, and that knowledge is really critical to arming them with that kind of confidence to make the decisions. But equally, we also saw that women are starting pensions later than men; they have savings, as you said, but they're starting pensions later. This is because they're prioritising children, other forms of saving or not prioritising themselves first. And also their financial confidence, education and knowledge change the way they behave quite dramatically.
Q3: According to WealthiHer’s research, finance is still perceived as a man’s world: how do we change this – in practice?
We talked about the perception that investing is a man's world. What can we do to help change this perception? The work that you do at WealthiHer is hugely important to this, Tamara, so it'd be great to hear why you founded WealthiHer and how you think you are changing perceptions.
WealthiHer was founded out of a simple idea and a simple challenge. I'm an entrepreneur and I've done loads of work in my career marketing to women, understanding and empowering women through the programmes I've worked on. I was approached by someone from within the finance industry who said, ‘I'd love to start a network that works across financial organisations and does it differently’. It isn't solely about the women within, although it is about raising the profile of those women, but it's actually about changing the way that the industry and financial service organisations understand, enable and cater to women. And when we first started this question, because I am an entrepreneur, I was like, ‘yes, I love this idea. We can do this, let's think differently’. And we did have some meetings where people were like, ‘what, we're going to work with our competitors to understand the market and change our products and services?’. And we were like, ‘yes, this is how we can drive real change’. And we were really fortunate that nine months later we had some passionate people from within those organisations who said, ‘we are going to make this happen. We're going to do this together’, so we launched on International Women's Day in 2019. The way that we change perceptions is by using research and saying, ‘what are the problems? What are the opportunities? What are the challenges, working with our partners individually, how do we better communicate? How do we better enable and give women this knowledge and confidence that Ann-Marie spoke about? How do we engage with them differently?’. Women are busy, even more stretched than ever before, so how do we connect with them? And how do we connect them with each other? So that has been one of the big learnings and we had some wonderful sessions with Tilney and some clients where women said, ‘actually, I want to talk to other women, I don't just want to talk one-to-one, although that's very valuable. I want to talk within a group and understand what other people are doing’. We created this open environment where you can ask questions and learn not only from experts, but from each other about decisions and change.
In terms of changing perceptions, I touched on it raising the profile of women in the industry. Women do want to see more women in financial services across the board. We have to raise the profile and the connectivity of women. And that's some of the work that we've been doing together. And also there's some things that have come out again, like 50% of women want less jargon; it almost creates a club and they might say, ‘I’m not risk-averse, but I am risk-aware. I don't feel confident in my knowledge but if you have a lot of jargon, then I don't understand and it makes me feel I'm not on the top of understanding’. And that's a big challenge for us. But I think it's one as the network we should really take up: how do we reduce that from a legislation point of view? That is a big barrier that's come out even stronger this year.
I definitely agree with you on the jargon. I come from outside the financial services industry originally and there's so much jargon when you join this world. I'm a huge advocate for plain speaking. I'm also a huge advocate for collaboration. I think that's something that women particularly do really well. Ann-Marie, as a female financial planner who has been around for a number of years, do you think perceptions have changed in your time? And what can we do to move it forward?
I think this is a long road, isn't it, to change perception? Our perceptions, whilst they might feel real, it doesn't actually mean that they are factual. So we need to help people understand the facts and use the right language. How I've taken this as a part of my role at Tilney, is that I feel that it's really important to educate all sorts of positively challenged mindsets; I see this as a large part of my role. A lot of the time, I'll sit down with females and they will have a certain perception of an outcome. My role is to make sure that I can change that in the right way and not be afraid to have an open discussion with them to get to the bottom of what it is that's driving it. Open discussions are really important, and also by talking, highlighting the pros and cons of different approaches, using visuals, drawing different pictures, we offer different ways to help people see things. We've got a cashflow tool where we can put in some scenarios or what ifs and it's great to see these things visually. A lot of us react to seeing those: putting in more catastrophic outcomes and still seeing that things might be okay help us get confidence around the decisions that we're making. Also, when you look at different facts and figures and we talk through how they might be fitting to your circumstances, we often see the light bulb moment. When you connect together, you can help individuals see things differently. And what I've seen with different types of females that I work with, is that it takes time to digest and get confidence; we might take small steps over a number of months or years with individuals to get them to a point of really getting comfortable. I think Covid-19 has been a great time to work on changing perspectives. We've all had a change in our working patterns and income might have been affected. People also have more time to review their finances or to listen to different things such as podcasts, or webinars, and to read and dare I say it Zoom. And the wonderful thing is: it's given a lot of people more time to think about things.
At Tilney we focus heavily on speaking in a language that women understand, providing much more female-focused events, content and communications more so than ever before. We will work with partners who share our view, and WealthiHer’s an absolutely prime example of that. So I think for us changing perceptions has been about welcoming women, changing language and visuals and working with the different stages of their lifecycle with our female partners. And also not being afraid to say we know how to approach women and that women approach things differently. We totally get it. So let's just talk openly and not be afraid to ask silly questions. And it's actually not scary to get your head around things if you choose the right person to challenge you. And that's what we're doing at Tilney.
I love what you're saying. I'm famous in my team, I'm a visual person, but I'm commercial and I understand you. I run two companies and I'm constantly drawing or visualising what the company growth is; I need to see it that way, otherwise it doesn't impact with me. The stuff that you're talking about with the visualisation and the cash is so useful: there are people that want things in different ways. We've sat in groups with women who said, ‘I want to work with an organisation where I can output spreadsheets and do my own analysis’. Of course, there are different people, but catering to the different needs of different people with a different language is important. This ‘any question is okay’ approach is important too because we found that, even particularly with male and female entrepreneurs, there was commentary around ‘I've been so commercially successful, I don't want to look like I don't know’. And actually, when I come into this world I don't know about managing finance, not about my business outcomes. We’ve also seen that with male entrepreneurs.
Q4: Ann-Marie and Tamara discuss a balanced approach to investing and how to make sound financial decisions
I'd like to know why it's so important for women to become more comfortable with investing. So Ann-Marie, could you kick us off with this one, please?
Particularly at the moment, cash returns are at the lowest point I can remember. Inflation is at a low point, but usually on average it's between 2% to 3% per annum. If we don't take action to make our money work as hard as humanly possible, our actual money can devalue over time. Taking a view of what you've got and how to make it work needs to come into the conversation. We've got to take action with our excess savings and income, we've got to force it to work for us. And we just can't achieve this if we hold on to cash too long. We should always hold on to some element of cash, considering the things that you need. So don’t be afraid to be like, ‘I've got cash that's going to cover our next one, two or three year shortfalls’ and then actually starting to put timelines attached to things. We do live a lot longer than men.
Generally, we wouldn't want to rely on others, either for fun or for care in retirement; we've got to think about the fact that we generally will have lower pension savings than our male counterparts. Potentially, we might have lower State pensions due to career breaks and children. And we still tend to be in lower-paid roles across many industries, which means we automatically get less into our pension. Even following auto-enrolment, when your employer pays in and we match it, we tend to always have less. So I think what is key for women to realise is we do have options: they can all link to our personal preferences and our views. And we can spend time educating you to help you understand how to prioritise things differently, how you might not worry if you take a certain course of action and it might actually give you a bit of peace of mind. We always talk about getting the right work/life balance or family/life balance. It's really no different in the financial world: it’s all about getting a balanced view, balanced investing, balancing cash, balancing the amount of life cover that you've got and what you do for the children, what cash you need for the here and now. It's just sensible to set aside views for different future life events and the sooner you start to invest, the easier you will make it in the long run for yourself. And you might not have to take excessive risks: you can be really practical and sensible and take calculated risks attached to different timelines that you need. So think about conquering the here and now, some goals and timelines, and then take advice on how best to achieve them sensibly. Everything is absolutely personal and how you invest and plan is no different. Working with Tilney, I think this is how we want to get it right for you.
We've seen many more women over the period of the last two to three years more focused on investing with ethical or sustainable governance views. This is coming much more into the market now. We can actually talk to women about lots of different things that can sit with their moral values as well. And that's really important. So investing doesn't have to be in the things that you might not agree with, it can actually be taken with the full moral beliefs you've got and your ethical views, and take the right course of action for you.
I think they're all good reasons to start having this conversation and thinking about this now. Also, the other key takeaway is that you can make it really personal to you; you can make all these things work for your personal circumstances and also for your aims and objectives and morals, like with ethical investing. Tamara, what's your view on why it's so important for women to start investing?
I think that there is a number of reasons. One completely mirrors, again, what Ann-Marie said around women not investing. We've seen in our data that they're not using their money in a way that is most optimal to them now or in the future. Taking the returns on cash, for example: we saw from our research, there was a five times increase in savings in the first lockdown as measured by the Bank of England; the worst possible choices in a way of where that money should have been going, but it felt safe for people. So generally there would be much smarter ways, for women in particular. I would put myself in that category: I am an entrepreneur and my future is wrapped up in my business. I have been terrible financially, either in relationships or in planning for myself. I have done exactly the textbook: I have protection for my son, life insurance, and I'm really last and I'm in my mid 40s. So I have used this as a moment for myself to say: I need to change that. And I need to behave quite differently. Because it's the smart thing for me and for my family.
We've seen as a second point that, in fact, because this is a health-driven crisis, women have started saying, ‘actually, I want to get more involved in finance or in financial decisions, because the future of myself or my family depends upon it’. And in fact, now, this has really put things into focus. Things can change from the macro-environment, and they can dramatically impact us all. We need to go out, meet them and say, ‘we're here, wherever you are on that journey’. As Ann-Marie said, we are here for you wherever you are on that journey. And we will help you make the right decisions with what you've got now and what you've got in the future. So I think the ‘here and now’ is really important. We've got the impetus although we’re coming from a start where women still feel: ‘you don't get me’. So that's what we need to change. And then finally, which I love: women want to invest well. And actually, through our research, we found that 89% of women want to work with financial services organisations or make investments that are both environmentally and socially responsible, that do good for society. So we have this firm belief that women want to make good choices, slightly more than men. And in fact, if we get women investing, not only can we use those good choices to build that ‘better’, as the Government keeps saying, but we can also use those choices by women to empower and enable them to make the decisions they want to make, positively. And then there’s also a broader financial recovery point of view, an economic recovery point of view, if we engage women in the right way. I think there's lots of opportunities.
It's interesting that a lot of people have saved five times more than average due to the crisis. What we try to educate individuals about is that, at the point when the markets dropped and everybody was feeling that they would hold on to cash, in effect if you had started to invest at that time, you are getting the opportunity to get the best value for money and to make your money work as hard as possible. When the markets are reacting poorly or negatively, it's an opportunity for you to invest in something that, after a period of time, should in theory go up in value, although clearly we can't guarantee that. So I think it's been an interesting time and one that we took seriously. We reached out to all of our contacts at the beginning of Covid-19 to explain this and take time to continue to educate.
Q5: 2021 financial resolutions: a to-do list for everyone
Talking about the ‘here and now’: we're recording this in January, which is the time people traditionally set their good intentions and resolutions for the year ahead. So, Ann-Marie, in terms of financial resolutions, what should be the priority list for women out there?
So aside from saving money and doing dry January, I think it's really important that you take some time to understand that in each tax year we all get an opportunity to receive income at a certain level of tax or invest into things within certain allowances. Every single time we've got opportunities with taxing, which outside of investing and taking risk is a great way to make sure that you're not being taxed on any returns that you're getting, or sometimes you're taking advantage of tax reliefs the Government might provide. So that might be, at this point in time, number one of the actions that you can take before 6 April, which is the change in the tax year. I'd like people to think that they should understand their tax position, understand that they've got allowances and an opportunity to use them. To do that, you would have to look at your income and your outgoings, look at what you're saving and where and also you should check your existing investments or, if you're investing into a pension, actually understand how your existing portfolio is being invested. Do you know how it's performing against a standard benchmark? Do you know if you've got cash investments at a competitive rate of interest?
And lastly: do not put off saving into a pension. Before you know it, you'll be getting into your early 50s. The longer that you leave it, the harder it's going to be. And a lot of things are also likely to change in the Budget, which is on 3 March. So you need to understand if you are going to be impacted by any of these changes, because there might be some things that you can do now to negate any issues. If you don't understand, make sure you find out in 2021. Make this the time that you will understand how this all links into the big picture, you definitely won't regret it. It will just empower you to know either that the things you're doing are already really good for you, or that you need a revamp.
2021 - the year of empowerment. What about you and the WealthiHer team, Tamara? What are your financial resolutions?
On a personal level, my financial resolutions are face up to things like: where are you? Have things changed as a result of Covid-19? How do you need to adapt or have things changed in terms of the market? There are savvier, smarter choices to be had. You have to know where you are and understand what the possibilities are. I think it’s really important. Make a plan and ask for advice, because once you get into it, it is not as complicated as it might seem from the outside. There are wonderful experts like Ann-Marie who you could ask any question – do not be scared to ask any question. Those questions will equip you with knowledge that you don't have. Let them do what they do brilliantly to your benefit. And finally – just make a start, even small. If your investments were in property and not in a pension, don't be scared to change that. If you’re nervous to change that and do something differently, do it in a different way. But just start, because it will set you free.
A lot of people have said this year – actually more women than men – that it's about health and happiness: I want that for myself and my family. The reason we work so hard is to enable possibilities for ourselves and our loved ones. Those financial plans will make them more feasible and possible. At the WealthiHer team and with our partners, we have a firm commitment to build on what we did last year: we had 80 events with women clients talking about what it is they want, and arming them with information, knowledge and confidence to go out and make smarter financial investment choices. And we will continue that mission because we know it is now even more important. We're also reaching out into the next generation; they have had a lot of interrupted paths, whether it's education or careers, gap years, and actually a lot of them are leaving university saying, ‘I don't have the knowledge, I don't feel equipped with everything from credit cards to mortgages’, so we’re extending our reach as a network to help young women from the beginning or daughters of our clients. Those resolutions are clear, as well as changing the industry as a whole together through collaboration, because together we can do big things and we can have incremental big strides.
Investments go down as well as up and you may get back less than you originally invested. This article does not constitute personal advice. If you are in doubt as to the suitability of an investment please contact one of our advisers.
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This article was previously published on Tilney prior to the launch of Evelyn Partners.