Women investing wisely: women represent a growing share of new customers for financial-services companies

American Demographics, August, 1997 by Christine Blank

Women represent a growing share of new customers for financial-services companies. Businesses that help these enthusiastic investors along the learning curve will get a piece of the action.

American women have become more financially independent in the past few decades. They are more likely to earn an income and run a household on their own. They're also getting more involved with long-term financial planning. As more women become serious investors, they are looking for an education in how to manage their growing stockpiles of money. They are eager students.

The financial-services industry is feeding women's enthusiasm with an ever-growing number of conferences and seminars. These educational/sales events range from one-hour sessions held in local community centers to three-day conferences filling convention centers in large cities. The "teachers" include representatives of banks and other financial-services companies, investment newsletter editors, and other experts. Larger events feature exhibit halls filled with fund-management firms offering their services. Some events cater exclusively to women; others don't. What they all offer is a chance for women to become more savvy and aggressive investors.

Take 45-year-old Janet Dutka, a recently divorced business owner without children, living in Larkspur, California. After entering the stock market just over a year ago, Dutka snared a 28.9 percent return on her investments. She attributes her success to a variety of sources, including investment newsletters, her own research and the advice of experts at The Money Show, a conference for investors held annually in several U.S. cities.

Dutka had attended The Money Show in nearby San Francisco in October, but she still flew to a February 1997 event in Orlando, Florida. "This is how I keep my pulse on the world markets," says Dutka, who has invested in a variety of markets, including the Junior Gold Mining Market. Dutka says she did not want to wait another year for the conference to come back to San Francisco, because she has "so much catching up to do" after only a short time in the investment world.

Dutka is not alone. More women are seeking experts' advice at InterShow's The Money Show. More than 1,600 women flocked to the Orlando show this year, up 7 percent from 1996. Close to 2,000 visited the Las Vegas show in 1996, up 11 percent from the previous year. Just over 1,500 attended the fall 1996 San Francisco meeting, up 29 percent from the year before. "It is just part of the overall trend for both younger women and older women, particularly widows and women expecting to become widows, to be investing more," says Charles Githler, chairman and founder of InterShow.

Women are demanding more seminars designed especially for them at The Money Show meetings, a drastic shift from four years ago when InterShow officials tested similar programs and received a weak response, says Githler. But now dozens of financial-services companies are getting on the bandwagon, offering investment seminars for women. Bank of America recently launched a Women's Financial Initiative Program, which includes a series of educational seminars in California on financial planning and money management. Major firms such as Merrill Lynch, Prudential, and Smith Barney have all launched similar ventures in recent years.

The Money Show is beginning new seminars for women that will be geared toward the neophyte investor, featuring basic instruction about the stock market and mutual funds. But not all women are beginners. Many experienced female investors invested early with high-risk stocks that do make higher returns over the long term. "If they get into biotechnology, pharmaceutical, and other stocks that are volatile but good performers, they tend to be very patient. In addition, I can think of a few women who take more risks but do better than most men," says Githler.

"Women cannot afford to do as well in the stock market as men--we need to do better," says Mary Jayne Fabian Barnett, vice president of Fabian Financial Services in Huntington Beach, California. Her reasoning? "Statistically speaking, we outlive our spouses," she told The Money Show attendees in Orlando.

Women also have more ground to make up, because they still earn less than men. Even so, women have more of their own money to manage these days, and they are taking greater responsibility for managing the assets they share with spouses, largely because they're contributing more of them. "It used to be that the husband provided 90 percent of the income," says Fabian Barnett. No longer. Census Bureau survey data indicate that 48 percent of working wives provide at least half of their household's income. IRS statistics indicate that 43 percent of Americans with gross assets of $500,000 or more are women. But even in the average household, women are getting more hands-on involvement with money management.

Willing to Learn

Fabian Barnett spoke to an audience of men and women, mostly in their early 50s. "The men came because they want their spouses or significant others to get involved in investing now, instead of waiting for a crisis to hit," she says.