Differences Between Investment Choices of High Net Worth Women and Men
High Net Worth men and women have different views on the important factors that go into the selection of investments.
Spectrem’s report on High Net Worth Men vs. Women showed that women are more likely than men to regard the past track record of investments, and the reputation of companies where investments are being made.
Such dependence on past record and reputation goes hand-in-hand with data that shows men are more likely than women to deal with their investment decisions without the assistance of an advisor (38 percent to 29 percent among all investors). That would seem to indicate that men deal with investments on a case-by-case basis rather than rely on an advisor to make broad recommendations.
The Spectrem report looked at men and women from three different wealth segments – Mass Affluent (with a net worth of between $100,000 and $1 million Not Including Primary Residence), Millionaire (with net worth of between $1 million and $5 million NIPR) and Ultra High Net Worth (with a net worth of between $5 million and $25 million NIPR).
Eighty-five percent of Mass Affluent women consider the reputation of the company where investments are made as a significant factor in making an investment, while 83 percent of Millionaire women and 76 percent of UHNW women are so inclined. Among men, only 78 percent of Mass Affluent and Millionaires consider reputation as significant (UHNW men have the same percentage as women, 76 percent).
The differences in terms of past track record are more stark. Eighty-two percent of Millionaire women consider the past track record, to just 67 percent of men, and 81 percent of Mass Affluent women consider the past track record as significant to just 71 percent of men. Among UHNW investors, 78 percent of women and 68 percent of men consider the past track record of their investment choices.
High Net Worth Men enjoy investing more than High Net Worth Women, which may be why women have a greater need to rely on the past track record of their advisors. Fifty-four percent of men say they enjoy investing to 36 percent of women, and among UHNW investors, 68 percent of men and only 41 percent of women say they enjoy investing.
Overall, twice as many women as men consider the social responsibility of investments, 46 percent for women to 24 percent for men. The wealthier the investor, the greater the difference, with 34 percent of UHNW women and only 15 percent of UHNW men considering social responsibility as a factor. Among Millionaires, it’s 45 percent of women and 23 percent of men who care about the social ramifications of an investment.
Women generally consider tax implications of investments more than men but the two genders are similar in terms of the level of risk associated with investments, as well as the diversity of investments.