Women take the lead in trading
New data from AUSIEX reveals that women are closing the gap on men when it comes to investing, representing an emerging opportunity for advisers.
Research highlights that men often out-represent and out-earn women, whether it’s the gender pay gap or executive roles in Australian business. New data from AUSIEX reveals a different picture emerging when it comes to investing.
According to an AUSIEX whitepaper, advised female traders now outnumber males for the first time since the firm’s trading records began in 1996.
The whitepaper, Australia’s trading transformation; a comparative analysis of how market segments are approaching today’s market, and what it means for advisers and investors, revealed trading by advised female clients grew to 52.4% in March 2021 from 47.3% in November 2019.
The whitepaper analysed trading in equities and exchange traded funds (ETFs) across different market segments in Australia during the period between November 2019 and March 2021.
Source: AUSIEX whitepaper
The percentage of advised women that are acting as the primary account holder also increased to 39% from 33%. The fastest growing age groups for new female clients was in the under 20s and 40-50 age brackets.
The data from AUSIEX is consistent with other industry research. The ASX Australian Investor Study also found that 45% of new investors in the past year were female, up from 31% five to ten years ago.
“It is pleasing to see that females are increasingly driving the advised relationship,” AUSIEX Head of Product & Distribution Andrew Stewart says.
“Women are taking control of their financial destiny, which is a reflection on the growing participation of women in the workforce,” Stewart adds.
The period assessed included national lockdowns in Australia in response to the global health pandemic and subsequently the beginning of the global COVID-19 vaccine rollout.
The health pandemic did slow the growth in female trading, according to the AUSIEX data, with the biggest gains occurring in the months leading up to the pandemic.
According to the data, the ratio of women to male traders slipped back slightly during the lockdown period as more men entered the market, potentially reflecting a more cautious approach by women to trading in volatile times.
Research has shown that women get better trading outcomes on average than men, but trade less often, so the data may also be reflecting that restrained approach – with women less likely to want to start trading during such a volatile period.
The data, however, did reveal that the proportion of accounts held by women began to pick up again after the market stabilised and the economic outlook began to improve later in the year.
The value of advice for women
The report also revealed nuances in the way women approached the market compared with men.
Here the advised relationship is key. The AUSIEX whitepaper revealed that the growth in female advised investors outweighed the growth in female self-directed investors.
While 52.4% of advised clients were female in March 2021, the proportion of self-directed clients that were female fell to 32.8% in March.
Clearly there is a growing opportunity for advisers to provide services to female clients. The ASX Australian Investor Study revealed that women were more open to receiving financial advice than men, with a third of those surveyed indicating they would seek out a financial planner because they were not comfortable with making investment decisions.
For AUSIEX’s Stewart, advisers have an opportunity to focus on this growing market.
“While our data has revealed a growing participation by female investors, they are also seeking support and help with their trading and investment strategies. There is definitely a role for the adviser.”