Assets

Building up wealth: what is women’s focus?

Women often pursue long-term financial goals – for themselves and their family. The following factors influence how they invest.

03 Jun 2022 4 min read
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The main points in a nutshell

  • A new report from the UBS Chief Investment Office shows that women are increasingly interested in finance.
  • Their investment behavior is influenced by a desire for financial security.
  • Women take fewer risks and invest for the long term. They also prefer investments that reflect their personal values.

Women are increasingly taking their finances into their own hands and talking more openly about financial matters with friends and family than in the past. The topic of finance accompanies them in various facets through different phases of their lives. We see this in the latest UBS CIO (Chief Investment Office) Report “Women and Financial Investments” from February 2022.

For women, personal wealth primarily serves to give them long-term financial security – both to provide for their own retirement and later for their surviving dependents.

Globally, women are becoming wealthier. According to the BCG Global Wealth Report 2021, women are wealthier today than five years ago. Notably, their assets are growing faster than those of men.

This despite the fact that even today women frequently encounter hurdles that make it more difficult for them to build up wealth. In addition to salary disparities, career breaks (for example due to childcare) can have a negative impact on their ability to accumulate wealth.

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Investing for greater financial security

The latest findings on women’s investment and retirement planning behavior confirms that their approach to personal finances is changing.

Not only are finances a more common topic of conversation among women: the desire to take their finances into their own hands means women’s interest in investing is also on the rise. The report shows that 67 percent of the women surveyed want their investments to secure their wealth and to provide for their retirement for the long term.

The UBS CIO Report identifies one important factor: women approach investing differently than men. In particular, women have a different focus when it comes to investing. In the following, we explain the biggest differences revealed in the report.

Focus 1: Security

A survey conducted by Nutmeg – an online investment management company – shows that only three percent of all female respondents want to take on higher risk when investing. For men, the figure is 26 percent. Does this mean women are more risk-averse? Not per se, as the Nutmeg study cited in the UBS CIO Report shows. Rather, the difference between the sexes lies much more in their perception of risk. Women want to be able to assess the outcome of an investment. They are more pessimistic than men. If women believe the risk seems predictable, for example because they have enough information, they are also willing to make riskier investments.

Focus 2: Personal values

Another finding of the UBS CIO report is that women investors are looking for investments that match their personal values. According to the UBS CIO Report, women care twice as much about investing in companies that are committed to sustainability regarding environmental, social and governance criteria. Women have also been shown to do more research than men and have more diversified portfolios.

Focus 3: Expertise

The report also shows that the majority of women consider personal advice from an advisor to be important. With respect to such advice, values such as honesty, knowledge and transparency are key. Women seek advice that helps them achieve specific goals, not to develop investment strategies that might help them beat the market.

To achieve greater financial security through investments, it pays to create a plan early on. UBS’s Wealth Way advisory approach can help you make the right decisions to build up your wealth at every stage of your life. Read more about this in this article or ask one of our advisors to help you.

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