Oppenheimer Survey on Women and Investing
Women Are More Confident in Their Investing Abilities but Many of Those Surveyed Lack Understanding of Investment Vehicles
NEW YORK, NY, October 21, 2004 -- Women are more confident in their investing abilities, but still feel they need to become more knowledgeable about investment basics, according to a survey by OppenheimerFunds, Inc, a leading asset manager headquartered in New York. The study also showed that while women are charged with budgeting and paying bills, many are not in the driver's seat when it comes to selecting investments.
The online survey by Insight Express examined the investment behaviors, knowledge and attitudes of 1,000 female and male investors who participated in the company's online survey panels. In 1992, OppenheimerFunds conducted a major research study on women and money, and has been a leading advocate for women's financial independence since then. The Company regularly conducts studies on women and their investing habits. The last one was completed in 2002 to mark the tenth anniversary of the original survey. Smaller scale research studies are conducted to maintain current information on investing patterns and knowledge levels.
"We're encouraged that women -- and in particular women who engage financial advisors-are more confident investors than ever before," said Lauren Coulston, Assistant Vice President and Advocacy Manager for OppenheimerFunds, Inc. "However, there is progress to be made when it comes to women's knowledge of investment terms and vehicles."
When asked to rate themselves on how well they manage their money on a scale of 1 to 10 (with 1 being the lowest level of knowledge and 10 being the highest), four in every ten women rated themselves as an 8 or higher on managing their money. Of women surveyed, 35% consider themselves very or somewhat knowledgeable when it comes to investing. This knowledge level appears to be rising over time, as 42% of women say their knowledge has increased over the last five years.
The survey evidenced that women feel they can benefit from learning at an early age. Despite feeling more knowledgeable than they did five years ago, 80% of women surveyed wish they had learned more about investing growing up.
Although they report feeling confident, 41% of women believe that other people know more about managing money than they do. To test specific knowledge of investment vehicles, the survey quizzed respondents on their understanding of mutual funds. Nearly 60% of women responded that they do not know how a mutual fund works vs. 45% of men.
Many Women Still Responsible For the "Chores" Associated With Investing
The survey also revealed that while women are increasingly working with financial advisors, they are still responsible for the "chores" related to investing rather than the real investment decisions. Sixty-one percent of women are responsible for paying bills and 53% of women are responsible for developing or maintaining a budget. When asked who is responsible for buying and selling stocks bonds and mutual funds, 38% of men said they are and 26% of women.
"Paying bills and budgeting are an important part of the overall investment process but people really learn from doing the research and understanding investing to the extent they can make decisions," said Coulston. "Women need to take a more active role in selecting stocks, mutual funds and the investments in retirement plans."
Higher income women may be more comfortable with investing because they are more likely to work with financial advisors. Seven in ten (71%) higher income women are more comfortable with investing because they work with a professional financial advisor. Most (62%) higher income women are more confident in having money for the future.
Financial Advisors Can Give Women a Confidence Boost
According to this survey, financial advisors may be contributing to women's confidence in their investing abilities.
"Women with financial advisors are more likely to be comfortable with their money and rely on financial advisors to keep them informed about money matters," said Coulston. "They see the benefits of professional advice and having someone to look after their investments and savings."
The survey revealed that 21% of women respondents and 26% of men respondents are currently working with a financial advisor. In households with financial advisors, 28% of men and 23% of women are responsible for working with advisors.
Among those with advisors, 65% of women and 66% of men say they are more knowledgeable about investing because they are working with a financial advisor. In addition, 60% of women investors with advisors are more confident about having enough money for the future.
While men appear to be greater risk takers than women when it comes to money, women are also more likely to take risks knowing that they have the support of a financial advisor. Forty-one percent of women say they are more willing to take risks with investments because they are working with financial advisors.
"Advisors should realize that women are a powerful group of investors with a significant amount of money," said Coulston. "And women are not only controlling their own money, but in many cases controlling the household's relationship with an advisor."
Both men and women find their advisors through word of mouth. Among those with advisors, 58% of men and 57% of women found theirs through a referral.
Preparing for retirement and more ...
Women are taking action and getting ready for retirement. Of those women surveyed, 55% have invested for retirement through a 401k 403 (b) or other employer sponsored retirement plan. Also, women are playing an increased role in retirement planning in their households. Thirty-six percent of women surveyed are responsible for saving or investing for retirement vs. 42% of men.
In addition to the confidence women may gain by working with financial advisors, women's confidence may also stem from their conservative investment strategies. For example, women are less likely than men to rely on friends or others for investment advice. Less than one in ten women have ever bought a stock on a tip from a friend, relative or coworker, while 20% of men have bought a stock on a tip from a friend, relative or coworker.
Both men and women report knowing the importance of money not only for retirement, but also for their own enjoyment, for life events, and for how it makes them feel. Seventy percent of women said the more money they have the better they feel about themselves. Both men and women realize that they might need to consider money for things other then their own retirement. Twenty eight percent said it is likely that they will have to support their adult children financially and 28% said it is likely they will have to support their parents financially. When asked what would make them change financial advisors, 59% of men and 58% of women said they would do so if their investments experienced a significant loss.
OppenheimerFunds, Inc. is one of the nation's largest and most respected investment management companies. As of September 30, 2004, OppenheimerFunds, Inc., including subsidiaries and controlled affiliates, managed assets of more than $155 billion, including assets in more than 60 mutual funds and more than 7 million shareholder accounts.
OppenheimerFunds, Inc., Two World Financial Center, 225 Liberty Street, 11th Floor, New York, NY 10080
OppenheimerFunds, Inc. is not affiliated with Oppenheimer & Co, Inc. or Oppenheimer Capital.
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