Canadian women are less confident than men when it comes to investing by a factor of half, new research from the financial app Mylo suggests.
According to the study, women set an average financial or savings goal of C$24,842, while men set an average goal of C$47,810. In addition, only a combined eight per cent of women who use the app would consider themselves “knowledgeable” or “an expert” when it comes to investing, in comparison to 25 per cent of men who felt comfortable making that claim.
WATCH: The ins and outs of RRSP investing
“The thing that comes to mind is the famous Gretzky quote that you miss 100 per cent of the shots you don’t take, and that’s essentially what setting lower goals is. I think this points to a confidence gap that has been widely reported in other studies over the years. That’s the thing that stands out to me the most,” said Amelia Young, founder of the consulting firm Upside Consulting.
Young, a thought leader in the Canadian financial space, explained that this gap likely goes back to the lower representation of women in Science, Technology, Engineering and Math (STEM) fields across the country.
WATCH: 5 simple tips to become an investing genius
“If we had more women pursuing those more advanced, quantitative types of study, I think that’s part of the story here. When you get into more complex, longer-term investing, it is a lot more about math, and the industry doesn’t particularly make that simple, either,” Young said.
Upon signing up for Mylo, users are asked a series of questions about their financial goals, their savings targets and their general knowledge of investing. A sample of these introductory questions from over 30,000 users was used to produce the study.
Young says releasing studies that demonstrate the problem is just the beginning of the solution. The next step is for the financial industry to consciously place the same expectations on women to become savvy investors as it currently does on men.
“One of the key things to do to address this is to actually have expectations of women to take these things on… And having somebody expect you to do it is kind of the most authentic form of that reinforcement. If it’s taken as given that women should be doing this, then there’s more of a tendency to step up,” she said.
WATCH: Scared to talk about your finances? It could make you a victim.
The study offered several examples of the lack of confidence Young cited. Women are half as likely to favour higher investment risks and are twice as likely to decide to avoid loss. Furthermore, 40 per cent of women choose an investment strategy that generates additional income.
According to Philip Barrar, Mylo’s founder and CEO, Canada’s financial industry needs to be conscious of these gaps when creating investing products and programs.
“It’s definitely something that we’re conscious of when we’re building the product — how do we make it equally accessible? It’s something that may or may not have been a focus for other companies,” he said.
However, he adds that such considerations are part of the bigger issue of financial inclusion in Canada — and that the problem goes beyond just gender and affects other minority groups as well.
“In general, there’s a big problem with financial inclusion both in Canada and around the world,” Barrar said. “When I talk about financial inclusion, I think about two things: how do we make it accessible, and how do we make it affordable?”