Our guest blogger, Anna-Sophie Hartvigsen, is a student, author and entrepreneur seeking to empower women in the world of business. Anna spent some time at LCP over the summer as an intern. She is one of the founders and head of ‘Female Invest’, the largest female investment company in Denmark. Anna’s blog seeks to address the gender investment gap in Denmark.
All over the world, women are falling financially behind. They earn less, save less and fail to invest their money. Are these trends the result of a lack of skill and ambition among women, or do other barriers persist? This blog post uses Denmark as a point of reference, but the trends described are evident throughout Europe.
The gender divide among private investors
In Denmark, women have outnumbered men in higher education since 1975. They achieve better academic results and have a higher level of employment. But when it comes to investing, women are falling behind - only 30% of women actively invest their savings and 68% of the Danish stock market’s value is owned by men.
The fact that men invest more than women inevitably raises the question: Are men better investors? The answer to this question is a clear-cut “no”. Several studies conclude that women investing in stocks are better at it than men. This is seen in Denmark, where data from the Danish Central Security Depository shows that female investors have achieved better returns the past 9 out of 13 years. Based on presentations by the Danish Shareholder’s Association, this might be because 74% of Danish women do not believe they are knowledgeable enough to invest their money.
Based on this data, Danish female investors appear to hold a significant amount of unlocked potential. This is the motivation behind the organisation Female Invest in Denmark. Female Invest is a non-profit organisation helping women of all backgrounds to get started with investing. This work is rooted in the belief that most people can learn to invest their money – if they start by investing their time.
The concept has proven successful, and in less than 2 years, Female Invest has become one of the biggest investment organisations in Denmark. This indicates to me that the current lack of female investors is rooted in a lack of role models, confidence and targeted offers rather than a lack of skills and interest.
The financial industry is still failing women
The lack of females is also seen in the Danish financial industry, where women in senior positions are a rare sight. Even though women and men in Denmark aspire to be promoted in equal numbers, women are far less likely to advance despite having the same experience, same performance and the same degree. Therefore, the share of senior females has stagnated even though the focus on women’s empowerment has increased.
The same trend is seen in the UK, which, according to the EU’s latest gender equality league table, has made zero progress in tackling gender inequality in a range of areas including the workplace and with regards to income. This shows that the problem of unequal representation and participation in financial markets cannot be solved with good intentions alone.
Companies must acknowledge and directly address (un)conscious bias in recruitment and promotion processes. Allowing women to succeed in the financial industry should not only be done because it is the right thing to do. It should also be done, because research consistently shows that diversity fosters creativity and ignites productivity.
No easy solutions
There are no easy solutions to the problem of a lack of female representation and participation in financial markets. But the fact remains that the current lack of women negatively affects individuals, companies and society as a whole. Therefore, we should stop contemplating whether we can afford to spend more resources on improving female representation and participation in financial markets, and start contemplating whether we can afford not to. In Denmark, the pool of highly educated and ambitious women is huge. So what are we waiting for?
How will Education, Savings and Technology shape the future pensions landscape?
Our Future Pensioner campaign cranks up the volume on future-focused, meaningful and relatable conversations about pensions.Learn more