HNW female investors defying ‘risk-averse’ stereotypes

While previous data often portrays female investors as more risk-averse and unconfident compared to male counterparts, new research shows high-net-worth (HNW) women have similar risk profiles to men.

Wealth specialist JBWere’s whitepaper titled, The Growth of Women and Wealth, has put into question the investment appetite of Australian HNW female investors.

The paper, developed in conjunction with CoreData, discovered that female investors have similar risk profiles to their male counterparts.

One in five female investors (21 per cent) identify as an aggressive investor, the same proportion of men (20 per cent).

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Moreover, all HNW women surveyed said they have a moderate or good knowledge of the risk/return investment relationship. In comparison, men were slightly lower with 96 per cent reporting the same.

“The research demonstrates that HNW women are not necessarily risk-averse as stereotypes have suggested in the past,” the report stated.

“HNW women are gaining financial confidence and know-how. When it comes to financial literacy, HNW women do not rate themselves very differently to their male counterparts. This is significant, given that women typically underestimate their own knowledge and understanding on financial matters.

“Therefore, advisers would do well to abandon assumptions and instead seek to know their female clients’ unique level of confidence and understanding in the space.”

JBWere’s paper contrasts previous research from Netwealth last year, which found that less than one in five women felt very confident about achieving their investment goals. Overall, women exhibited less investor confidence and less risk-taking behaviour, according to the data.

Commenting on the new findings, Maria Lykouras, JBWere Australia chief executive, said: “More than ever women are taking charge of their finances and are seeking to be actively engaged with their investment portfolio.

“When HNW women seek investment advice, we know that they’re wanting to see a range of different investment options across both traditional and non-traditional assets and not be pigeonholed into products considered to have less risk.”

“The research tells us that it’s a deal-breaker for women if their financial adviser doesn’t capture the full financial picture and tailor investment solutions appropriately.”

Breaking down HNW female investors’ portfolios, the paper found that they were most likely to invest in real estate (63 per cent), Australian shares (59 per cent) and cash (51 per cent), as at December 2023.

However, one quarter of their investments were held in alternatives, which JBWere pinpointed as an opportunity for advisers to forge stronger relationships with female clients.

The majority (62 per cent) of HNW women reported an ongoing relationship with a financial adviser or using one occasionally, which exceeded the male rates of engagement with advisers (52 per cent).

Lykouras added: “Advisers play a crucial role in empowering already confident women to take the next step with their investments.”