MoneyThe Investing Gap We Didn't Budget ForWhat's going on: We know from the widening gender pay gap — and, well, all of history — that society doesn’t exactly set up women on equal financial footing with men. And a new study highlights a slice of the persistent problem: Financial advisers typically give worse investment advice to women clients. Why? They assume women are less “sophisticated” investors than men are (ah yes, the “little-lady” portfolio). The research shows this led advisers to steer women towards more in-house funds, where the bank earned larger fees. Women also received fewer sales-fee rebates. The study examined 27,000 meetings between advisors and clients at a German bank, and also anonymously sent actors to 539 advisors. It also found that both women and men advisors fell into this trap of stereotyping their female clients. An expensive assumption: The study isn’t exactly uplifting, but it is a reminder of the hurdles women face building wealth in an economy that often underestimates them. Banks could do more to address bias, but, in the meantime, you don't have to wait to prove the stereotypes wrong with your dazzling financial literacy. As expert Farnoosh Torabi told theSkimm, scale up to investing. Start with your 401(k) and then work your way up to individual stocks, keeping them under 5% of your total investments (check out more of her advice here). Always ask these questions before you invest. Meanwhile, build up your knowledge by following books and podcasts about money (though, just like you would an advisor, take any advice with a grain of salt). Related: What AI Means for the “Financial Independence, Retire Early” (FIRE) Movement (Business Insider) |
