Studies indicate that women tend to be less financially literate than men, according to Joanne De Laurentiis, president and CEO, Investment Funds Institute of Canada (IFIC), and advisors have a role to play in helping to close that gender gap.
De Laurentiis spoke as part of a financial literacy panel hosted by the Economic Club of Canada in Toronto on Monday.
A study by the Paris-based Organization for Economic Co-operation and Development (OECD) found that women generally have less financial knowledge than men, said De Laurentiis, and that this is a global issue.
Generally women with low financial literacy tend to be young, widows, or women with less education, said De Laurentiis. As well, women tend to get involved with finances because of the death of a spouse or a divorce.
Furthermore, because women don’t have as firm an understanding of finances they lack confidence in their financial abilities, she said, including investing. “Women are less confident in their knowledge of investments than men,” said De Laurentiis. “They’re more cautious when they are investors.”
As a result, women tend to focus solely on making sure their family’s finances are secure and avoid taking on any type of risk, she said, despite the opportunities available to increase their family’s wealth through investment.
When women do get involved in finances and investing, De Laurentiis said they tend to be disciplined investors who conduct research and seek out advice advice before making any decisions. Women are also less likely than men to invest on their own. As a result, De Laurentiis said women often tend to see better returns.
Advisors can help women make informed decisions and feel more confident about investments by acting as a resource. “[Advisors working with female clients] are approaching women by talking to them about what it is they want to achieve in their investments,” said De Laurentiis, “and helping them with the research.”