Women and their investment strategies
Since 2014, BNP Paribas Wealth Management has published its Global Entrepreneur Report, focusing on how wealthy entrepreneurs worldwide think about investment strategies in the context of managing their liquid wealth. The thematic explored this year - the Global Overview for Entrepreneurial Investment – unveiled certain differences in perspectives between male and female investors, in particular with regards to sustainable investments.
The BNP Paribas 2020 Entrepreneur's Study agrees that women entrepreneurs increasingly view sustainable and responsible investments as a core element of their portfolio and are more likely to consider that this allocation does not necessitate relinquishing financial return (34% vs 26 % for men). Another result: it seems that women want to invest more in their own business and are more open to new investing ideas from their advisors, but are also open to investing in foreign currencies or foreign assets. They should benefit more from an environment of low rates to refinance their activities (42% against 38% for men).
While the patterns of investment were relatively similar between genders, these slight differences illustrated how men and women manage and view their wealth.
A recent report by BCG (Managing the Next Decade of Women’s Wealth) highlighted some of these differences and provided interesting light on the topic.
Despite significant differences between regions, on the back of an environment where wage gaps are being reduced over time, and where women tend to have more access to leadership roles and increasingly become entrepreneurs, the global wealth managed by women has reached c. 32% of total wealth worldwide. Women’s wealth is also expected to grow faster than the market in the coming years. BCG estimates the total wealth managed by women will reach $83 trillion by 2023.
According to the BCG report, female investors are prone to adopting a more prudent approach then male investors. They endeavour to obtain more data and facts before taking an investment decision. The report underlines that their investment strategy is similar to male investors, albeit with a more balanced portfolio between asset classes. To this end, additional research and analysis are necessary to obtain a complete view of the potential risks and opportunities associated with an investment. In that regards, women are acting as responsible investors.
In that context, the most attuned private banks recognize that women are not looking for a gender-based approach to wealth management. They are looking for a tailored and individual approach where relationship managers focus on understanding their individual needs and personal goals in relation to the management their wealth. This approach is customised by nature and focuses on providing them with a full picture of investment opportunities, aligned with their values. This is what BNP Paribas Wealth Management offers to its clients: a personalized approach delivered by a high quality staff thoroughly trained to eliminate gender biases, and access to high quality data and information, leveraging the options opened by technologies.