Research shows gender divide in risk tolerance and confidence

New research from the Canadian Investment Regulatory Organization (CIRO) Investment Advisory Panel suggests that women save and invest less often than men do, they are less confident about investing and more risk adverse. “This difference is especially pronounced among younger women, age 18 to 34, who are more likely to report being unsure of where to start if they wanted to invest,” the report’s researchers write.

When working with advisors, they add, women value returns, plain language, respect and understanding of their life goals. “Both men and woman value returns and investment performance. However, women who work with an advisor place greater value on their advisor speaking without jargon and treating them with respect,” they add.

Among the 3,154 adult Canadians surveyed in April (the survey included an oversample of up to 2,041 women), 43 per cent of women identified as investors, compared with 56 per cent of men; 41 per cent say they save at least $5,000 a year (52 per cent of men said the same). “Differences in saving and investing are largest for people making less than $60,000 annually. The gap between women and men closes entirely beyond $100,000 of personal income,” they write. 

The survey also investigated confidence and risk tolerances: 47 per cent of women reported feeling confident about investing compared with 66 per cent of men; 61 per cent had a lower risk tolerance where only 45 per cent of men said the same.

“The report also showed that among non-investors, the most common reason for not investing is feeling they don’t have enough money to invest,” they write. “However, among younger non-investors, women are more likely to say they don’t know where to get started or that they must focus on paying down debt first.” 

Among investors who work with an advisor, the survey also examined what each gender values and prioritizes.

“CIRO’s Investor Advisory Panel identified the research objective for this study as gaining a deeper and more insightful understanding of the investing interests, goals and experiences of women, to better understand Canadian women investors and how they may differ from men,” the report states.