High net worth women investors are as likely as high net worth men to be involved, active, and engaged in the investing process and seek similar investment goals. More than half of those surveyed (53% of both women and men) state that they are the primary decision-makers when it comes to investing.
A new study, conducted by Center for Women's Business Research and underwritten by Goldman, Sachs & Co. "Active and Engaged: The Investment Goals and Strategies of High Net Worth Investors," explores the investment goals, strategies and practices of high net worth women and men (those with personal net worth of at least $5 million who are currently investors). The study focused on wealth creators: both business owners and those who built their net worth through professional careers. A strong majority of the high net worth women and men investors in this study (64% of women, 79% of men) say that they have created most of their personal wealth. On average, 60% of those surveyed created their personal net worth alone and 32% created their personal net worth with a spouse or partner.
"This study shows that, contrary to popular belief, high net worth women investors are as involved in decision making about their investments and spend as much time focusing on investing as do men," said Dr. Myra M. Hart, Chair, Center for Women's Business Research.
"Fifty-three percent (53%) of both women and men surveyed say they are the primary decision-maker when making investment decisions, and they spend the same amount of time on investing activities -- women average 11.1 hours per month and men spend 10.7 hours."
There were no differences between the high net worth women and men when it comes to evaluating their own level of knowledge about investing. "High net worth women and men are equally likely to report that they only know some or very little of what they need to know to make good investment decisions -- 60% of women and 63% of men. Conversely, they are also just as likely to report that they know most or everything they need to know about making investment decisions – 40% of women and 37% of men," commented Dr. Hart.
The high net worth women and men surveyed have very similar investment goals, with 86% of women and 87% of men saying that achieving and maintaining a comfortable lifestyle is very important when making investment decisions. Likewise, three-quarters (74% of women and 76% of men) say that increasing personal net worth is very important.
"When it comes to investing style and risk, high net worth women and men are equally likely (74% of women, 79% of men) to describe themselves as moderate – either somewhat aggressive or somewhat conservative," commented Ann Kaplan, Advisory Director, Goldman Sachs. "Fewer investors – women and men alike – describe themselves at the extremes: either aggressive and willing to take risks or conservative and wanting to avoid risks."
"The study showed that women and men have followed similar investment strategies in response to recent events. High net worth investors – both women and men – have generally taken more conservative actions and have increased the time spent on investing," said Kaplan. "Women especially have increased the amount of time spent on investing activities. Twenty-nine percent (29%) of the women in this study, compared to 19% of men, have increased the time they spend on investing."
The study shows that 90% of the surveyed women and men investors use at least one advisor and, on average, use three different advisors to help them make investment decisions. Furthermore, high net worth women investors are as likely as high net worth men to state that they either take the lead in their relationships with advisors or that they have a partnership with back-and-forth discussion. Women and men business owners are the most likely to either lead the relationship or participate as a partner and are less likely to say that their advisors lead the relationship. More than six in ten (63%) business owners speak with their advisors at least once a month, compared to 48% of non-business owners. Business owners are also more likely to be interested in accumulating assets to start or invest in a business, with 30% of business owners and 13% of non-business owners citing this as very or extremely important.
When making their most recent portfolio decisions, both high net worth women and men investors were more likely to have made a change based on a regular investment review rather than in response to market concerns. Analysis of past or projected performance is among the top two or three factors cited by 61% of both these women and men in making an investment.
The area of difference between high net worth women and men investors was in the selection criteria for advisors. "While trust and qualifications are important to both women and men in selecting a financial advisor, they are much more important to women," says Kaplan. "Fully 93% of the women surveyed said it is important to feel confident that the advisor is ‘acting in your best interest, not theirs,’ compared to 83% of men. Women also are more concerned with knowing how their advisor is compensated – 78% of women compared to 65% of men."
Women and men investors with the highest levels of net worth spend the most time on investing activities. Investors with net worth of more than $10 million spend an average of 19.9 hours per month on investing activities, compared to 9.3 hours among investors with $10 million or less in net worth.
The study also shows that women with the highest levels of investable assets are more likely than men at the same level of investable assets to cite becoming more philanthropically active as an important investment goal (58% of women compared to 39% of men).
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The report "Active and Engaged: The Investment Goals and Strategies of High Net Worth Investors," is available for $90. (Discounts are available for Center corporate partners and NAWBO members.) For further information, contact: Center for Women's Business Research, 1411 K Street, NW, Suite 1350, Washington, DC 20005-3407, phone: 202-638-3060, email: info@womensbusinessresearch.org, Web site: www.womensbusinessresearch.org.
Methodology
This nationwide study of high net worth investors was conducted, mostly by telephone, during April 2002. A total of 225 interviews were completed, 107 with women and 118 with men. The investors were interviewed by CJ Olson Market Research, Inc., a woman-owned market research firm in Minneapolis, MN.
For the purposes of this study, "high net worth" was defined as having personal net worth of at least $5 million. Among the women, 58 interviews were completed from a list of high net worth investors purchased from SDR, Inc.; 30 interviews were completed among members of The Committee of 200, a professional organization of leading women business owners and executives; and 17 interviews were completed among members of womenangels.net, an angel investment club. Among the men, all 118 interviews were completed from the SDR, Inc. list.
The sampling errors for sample sizes of 107 and 118 are ±9.7% and ±9.4%, respectively, at the 95% level of confidence. This means that 95 times out of 100, survey results will be within 9.7% and 9.4% of population values.
Center for Women's Business Research
Center for Women’s Business Research (www.womensbusinessresearch.org), founded as the National Foundation for Women Business Owners, is the premier source of knowledge about women business owners and their enterprises worldwide. The Center provides original, groundbreaking research to document the economic and social contributions of women-owned firms. To maximize the benefits of this knowledge, the Center has a comprehensive strategy to distribute its research through the media, publications, seminars and consulting. Corporations, government policy makers, educators, organizations, the media, and individuals rely on the Center’s leading-edge knowledge to strengthen their support of women business owners.
Goldman, Sachs & Co.
Goldman Sachs is a leading global investment banking, securities and investment management firm that provides a wide range of services worldwide to a substantial and diversified client base that includes corporations, financial institutions, governments and high net worth individuals. Founded in 1869, it is one of the oldest and largest investment banking firms. The firm is headquartered in New York and maintains offices in London, Frankfurt, Tokyo, Hong Kong and other major financial centers around the world.
