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

American Demographics, August, 1997 by Christine Blank

These oldest baby boomers are not counting on Social Security as their parents did. There's a "growing realization among those born in the late 1940s and 1950s that government isn't going to take care of you in your retirement," says InterShow chairman Githler.

Fabian Barnett believes women make better investors because they thoroughly study the market before they invest, then they "embrace risks." Her belief holds water. Women have traditionally been viewed as too cautious when it comes to money management. But research suggests that women are actually less cautious than they claim to be. Even so, their portfolios indicate that, yes, women could stand to take on more risk. Yet they're no more conservative than men, and women are getting better at going for the long shot. They're even outdoing men. Women-only investment clubs have earned a 21 percent average annual return since their start, compared with 15 percent for men-only clubs, according to the National Association of Investors Corporation.

The women-only approach is important. "Women are good support for each other and enjoy getting together, particularly in investment clubs. The female investing trend may take time, but it is going to snowball," says Fabian Barnett. Companies that put on seminars and other educational events have recognized that women trust other women. At some firms, it is women executives who have led the charge in their company's outreach efforts; others have deliberately recruited women to lead their educational programs.

At the same time, executives with Phillips Publishing, a long-time exhibitor at The Money Show, have seen mostly older, male attendees over the past few years. "Our subscribers are overwhelmingly men aged 50 to 75 years old," says Howard Present, assistant vice president of Phillips Publishing. "We have conducted tests, sending offers to men between 40 and 45, but it is rarely profitable to market to that group."

The $100-plus-a-year newsletters are primarily marketed to retired men who enjoy reading. Because most of the publications are not "visually appealing" and are geared toward the experienced investor, few women read them, says Present. "The personal-finance and managing-finance newsletters are more attractive to women. Although the women are very serious, very in tune, and very educated, they gravitate toward publications with editors who do more handholding," he says.

Handholding might sound patronizing, but women don't necessarily see it that way. They know they have a lot to learn. Unlike men, who are notorious for getting lost because they refuse to ask for directions, women are willing to admit they're not sure where they're going. Ninety percent of female investors surveyed by New York City-based Oppenheimer Funds in 1995 want their financial advisers to help educate them; just 76 percent of men agree.

Handholding might sound patronizing, but women don't necessarily see it that way.

As middle-aged women who have spent their entire lives working approach the crucial pre-retirement years, the number involved in serious retirement planning will grow even faster. In the meantime, industry experts believe both younger men and women are becoming interested in investing. Although 22 percent of surveyed visitors to The Money Show in Orlando last winter were aged 65 and older, only 14 percent and 10 percent of those at the most recent San Francisco and Boston events, respectively, were elderly. The majority of attendees at all shows are in the pre-retiree years of 55 to 64, but younger age groups are gaining share: 24 percent of attendees in 1996 were aged 45 to 54, and 14 percent were aged 35 to 44.