Finance

“Women would rather save than invest”

Especially in the corona crisis, it is advisable to take care of your own money. However, many women still shy away from this responsibility. Monika Rothenari, marketing expert at asset manager Blackrock, thinks that’s foolish.

Despite all equality, the roles in many partnerships are still classically distributed: the man takes care of the finances, the woman takes more care of children and the household. Accordingly, women invest less often in the stock market themselves – and thus take risks without knowing it directly.

Monika Rothenari knows this problem. She is Head of Marketing for Continental Europe at asset manager Blackrock. In an interview with t-online, she explains why women shy away from the stock market more than men, why there is no need for special investment products for women and why the financial industry should pay close attention to what it says.

t-online: Ms. Rothenari, when it comes to investments, women are considered risk-averse, they invest less in the stock market than men. Why is that?

Monika Rothenari: This has a lot to do with a lack of knowledge. Because what does “risk” mean? If my money is only in the savings account, it is also risky because I lose money every day because of the low interest rates caused by inflation. But that’s never how I’m told. Instead, only the fluctuating share price is always considered a risk. Many investors therefore mistakenly think that they would avoid risk by putting their money in a savings account instead of investing it in a fund, for example.

But on the stock exchange, prices can actually fall steeply. Why should I take this risk but not the one on my savings account?

The thing is: yes, it fluctuates more on the stock market, but that is precisely the condition that I also have a greater chance of a higher yield. This connection is not clear to many. And I can even reduce the risk myself – by diversifying my money widely and investing it over a long period of time.

Monika Rothenari: "Women don't just want to invest in Prada or Versace." (Source: Blackrock)Monika Rothenari: “Women don’t just want to invest in Prada or Versace.” (Source: Blackrock)

Men are less afraid of the stock market. So do they know their way around better than women?

At least men talk to each other more often about investing. It’s not that easy for women. Women don’t like to talk about money. It is particularly important for them to exchange ideas. I notice that again and again at events. When women are among themselves, they speak much more openly and notice that the topic can be really exciting once you get to grips with it.

Isn’t women’s risk aversion also related to the fact that they earn less than men?

That can be good. If I have to save the money to invest, it is clear that I am less willing to take risks. Nevertheless, one can say: almost every woman has 25 euros a month left over. From this sum you can already set up an ETF or fund savings plan. Many think that if you want to invest, you have to start with 10,000 euros. No need. You can be successful in the stock market even with little money. I can also work my way up step by step and use small amounts of money to try out how well I can handle the fluctuations. After that, I can always top up the amounts.

Where does this misconception come from that one must first have a fortune in order to increase one’s money?

That has to do with many things, but above all with the terminology.

What do you mean exactly?

In short: women would rather save than invest. When it comes to the word “invest”, many women seem to think that you have to take the huge suitcase and go to the bank with it. The word “save”, on the other hand, is much closer to them. And they also use it when they actually mean “investing”.

Monika Rothenari: "You can be successful in the stock market even with little money." (Source: Blackrock)Monika Rothenari: “You can be successful on the stock market even with little money.” (Source: Blackrock)

If “investing” has such negative connotations for women, isn’t the term completely unsuitable for the financial sector?

That’s partly true, yes. Because women prefer to save rather than invest, we now address them in exactly the same way and say: “Save in funds!”. And the question “Save or Invest?” has other consequences: What do women enter on Google? If you are looking for “save”, it would be good if you land where there is information about investing.

Is that why your industry is promoting savings plans so heavily? The word is already there.

Yes. This also explains, for example, why people still take out life insurance: They believe that it brings secure returns because you can save month after month. But that is a fallacy.

Why?

Because of the low interest rates. And because many forget the fees. If you put 50 euros in life insurance but lose 5 euros in fees, it is not very profitable. Many ETF savings plans, on the other hand, are much cheaper – and the returns can be higher. They are a good product, especially for beginners, because you can use a real example to learn how to invest in the stock market without having to invest a lot of money straight away.

Do we also need savings plans that are specially tailored to women and, for example, invest money in certain industries that are more interesting for women?

No, I do not think so. Women don’t just want to invest in Prada or Versace. So you also miss the goal of diversifying your investment broadly. Funds for women also existed a long time ago, but they haven’t established themselves. For this very reason, I suppose: women don’t need their own financial products.

So what? More female financial advisors?

Not even that. Women need a good counselor, just like men. Someone who listens to you, answers your questions in an understandable way and helps you further. As long as that works, it doesn’t matter whether the advisor is a woman or a man.

So you just need better consultants?

The consultants should be able to create an environment in which customers feel safe and no question seems too stupid to them. This is very important for women in particular. Often they look for the fault in themselves, but they should rather change their expectations. If a counselor can’t explain something to me, it’s not because I’m too stupid. Then I have the wrong advisor.

With the step to advice you are already comparatively far. Many women do not even begin to deal with the topic. How can that be changed?

That’s true. Women often want someone else to solve their problems – either their husband or the state. Only when they realize that no one else will judge it for them do most of them take responsibility for their own money. This is foolish. Right now it is advisable to take care of your own money. The savings rate went up during the Corona crisis, so people have money to invest. And we also see that something is happening. The number of deposits has increased, and people are more interested in investing. Many now have more time to deal with it. In this respect, the time to get started is good – also for women.

Thank you for the interview, Ms. Rothenari.

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