When it comes to investing, gender differences may be overstated, according to a new report from the Merrill Lynch Wealth Management Institute.
The firm reports that its study of 11,500 investors found that while men and women differ in their approach to investment decision-making, gender is less a determinant of investing success than other social, demographic and circumstantial factors. It aims to challenge conclusions drawn from research that has found women tend to be more risk averse, that they are less engaged in investment decision-making, and trade less often.
It says that its research found that men and women who have a similar level of financial knowledge share similar risk behavior. The greatest differentiating factor among investors is their perceived financial knowledge, and women are more likely than men to say they have lower levels of financial knowledge, it notes.
“Our research reinforces the importance of concentrating on the unique, personal goals of each investor. Doing so can identify a deeper understanding of the individual’s concerns and priorities which may better align investments to achieve the outcomes the investor desires,” said Michael Liersch, head of behavioral finance for Merrill Lynch Wealth Management. “We believe we need to change the dialogue with both men and women, to discuss what really matters to them and what they want their investments to achieve.”
The report also says that, while 58% of women say their focus on investing is to meet the needs of their family, more than 40% said they do not feel they should put financial support for other family members ahead of their own goals. And, approximately half are concerned they might not have enough money for the rest of their lives.