And so, as is the way of things, normality gradually reasserts itself as People and Things return broadly to where they should be. Children return to school (no, I know not for you lot down South yet), the Fringe packs up its flyers, wanderers depart and return and we take a deep breath before returning to the fray proper. This time of year is one of those transition times, and I usually quite like their unsettled nature; this year feels different for some reason and I’m keen to just get on with the next bit.
Maybe it’s the tough times that Rich wrote about in his data-based Update last week; maybe it’s a druidical great perturbation in the heavens; maybe it’s just a desire to get on with the rugby World Cup so we can take our kicking from South Africa and Ireland and just get on with it (it’s fine to be beaten by teams above you in the world rankings, so don’t worry about *checks notes* Argentina and Fiji, lads). Don’t know. But it feels like something’s building up and won’t burst through the dam till everyone’s back at their desk. Keep your eyes peeled, and umbrellas at the ready.
Till this strange tension is released, then, let’s concern ourselves with a new piece of investor research from AJ Bell, which makes for depressing reading. Our favourite Mancunians have established that when it comes to closing the gender investing gap, it’s not simply grim up North but grim all over, with only 35% of under-25 stocks and shares ISAs being women, and 37% of 25-34 year olds. It never reaches parity, but does improve with age, and isn’t a million miles away at a 46/54 split for the over-65s.
I’m acutely aware that as a pale, stale male I have no business weighing in, but in my defence I do have the lang kitten v1.0 who is bearing down on an age where this stuff will start to matter all too quickly and I think this is a timely reminder for me to make sure I plug the gaps that our frankly crappy education system leaves in terms of helping young adults and young women in particular understand the difference between short-term and long-term money.
The thing I think I find most depressing is that there has been no shortage of gender-based investment campaigning in recent years. AJ Bell itself has the Money Matters campaign, Santander does some very good stuff in this area (disclosure: Santander is a client of ours), Parmenion has its #AdviserHer campaign, and there is no shortage of finfluencer (horrible term, sorry) types aiming at getting women of all ages more engaged and maybe out of cash and into something that can reward them better longer term (try here, here and here).
Interestingly, AJ Bell finds that it isn’t that women aren’t putting money away; it’s that it’s all in cash. So younger female savers are quite capable of navigating the financial system; they can happily open products and allocate capital. The issue is that their choices are – from this industry’s point of view at least – suboptimal.
And in that I wonder if we have a hint or two as to why change is taking so long to come. It’s right to say that the language of financial services is exclusive and not in the designer-price-tag sense of the word. It’s right to say that it’s harder to encourage change in broad societal groups when those groups don’t see enough people who look like them doing the things they’re being encouraged to do; I don’t know what impact ethnicity has on levels of long-term investment but I bet it’s significant. The sector has a long way to go. But I wonder if the sector getting its house in order will ever and can ever do the trick (that isn’t to say it doesn’t have to keep doing the work).
“Industry which makes money from people investing says more people should invest” and “industry which makes money from people investing identifies massive potential value pool” is a tough thing to get past; right up there with “airlines say more people should go on holiday” and “turkeys advocate move away from celebrating Christmas”. How might we do that?
Folk much smarter than me are trying and failing. Whatever the answer is, it’ll be multi-faceted, complicated, slower than we all want and messy. And it’ll be expensive, because societal-level, big change always is. But one observation, if I’m allowed: if you really want to get people doing stuff fast, you need to make an offer they can’t refuse; potentially to your own financial short-term detriment. That’s how retail works, and retail is what we’re dealing with here. Who wants to be first to offer financial incentives on their products to close the gender investing gap, whether it’s fee-free deals, guaranteed cashbacks or whatever? And is ready to take the flak for so doing? Sorry lads, this one isn’t for you…
You’ll find the links below and your music choice this week is the new-ish single from Elizabeth Heaton and Rowan Burn; two remarkable Edinburgh-based women who go by Midas Fall. I am unaware of their investing choices, but I think if we all buy their stuff they’ll definitely want a risk 6 MPS or something soon. Anyway, Blink is stunning and you can listen to it here. There is a beautiful video too: it’s not the easiest watch, so I won’t link it but it’s on the YouTubes if you want to search for it.
See you next week