Women and Wall Street: What Women Investors Need to Know


In a world where we’re all told anyone can do anything, there are some realities about the investment world concealed behind the platitude. It may sound sexist or strange to address women in the stock market versus men; however, there are factors which make the conversation of changing how women view and engage with financial investments worth an awkward discussion.

The pay gap between the salaries of male versus female investors matters even more than the principle when one considers how women live longer than men on average.

Women are already making less than their male counterparts every month; on average, women make between 78 and 80 cents to every dollar earned by a man. Why does that matter when it comes to investments?

Aside from what a woman is left in retirement, this gap is general commentary on the stock market and how it is run. The market has long been considered a man’s world and most of the institutions in place to assist with the investment procedures are designed for men – those who make more and live just over 50+ years. These stats just don’t match up with the needs of women who are most likely attempting to get into the stock to reach specific goals rather than simply “beat the market,” or just make more money.

A female investor is not likely to have the same characteristics in her financial history; a man will not only live fewer years, but, he will have fewer gaps in his career history.

The market is not set up for the life path of a woman and, therefor, the way in which she invests needs to properly align in order for her to meet financial goals. As most brokers and advisers are men, there is an enormous disconnect to adequately serving women of Wall Street.

Even if women make more money, savings alone will not help with securing retirement funding or home and debt payment goals.

Financially responsible and successful women are often hesitant to invest in stocks for two main reasons: fear and trust.

According to planadviser.com, millennial women are highly conscious of their spending: 70% of those interviewed review their bank accounts once a week or more and 53% created an emergency account. However, 56% of the same responsible women avoid the market out of fear. 25% of those women cite paying off debt as the source of their hesitation while another 25% noted they just don’t know where to begin.

When it comes to getting started, trust is the big yellow caution sign preventing women from making the effort to invest. Wall Street is high traffic noise and confusion when it comes to anyone attempting to make investments for the future rather than become a day trader. Considering the stories circulating regarding investors who made great investments and lost them or were bamboozled by crooked stockbrokers or advisers, the risks may seem too much to bear for women who are already making less than men. As noted in a Forbes piece regarding women investors, who can women trust to advise them according to their specified needs?

ABC News spoke with innovator Sallie Krawcheck who knows all about what it means to be a woman investor in a man’s arena.

Krawcheck is the CEO of an investment tool designed specifically for women called Ellevest. In an interview with ABC, she spoke about her goals for offering women a better way to plan for their future and why it’s so important they step up and do so.

When asked about why women needed their own investment tool, Krawcheck answered, “It’s not that I think they do, it’s that the research demonstrates they do.” She continued, “We turned our attention to the fact that (the traditional industry setup) is just not working for them. What motivates a woman to invest is not winning but reaching her goals — buying a house, starting a business, retiring comfortably.”

Krawcheck’s online financial investing plan, a value of $1,000 available to women for free, guides women through the various types of investments available to them and which methods will bring them swiftly towards the house or debt repayment for which they are striving. She said the plan makes use of “…a very powerful algorithm. I don’t want to say we empower them, because I don’t like that word, but we give her the tools to make the decisions.”

The Ellevest financial plan for female investors speaks to the needs of women who are failed by the traditional system and dissatisfied with their financial advisers.

To this point, Krawcheck stated the current system, “doesn’t reflect [women] and therefore has not met their needs. It’s all about beating the market, not about meeting their goals. It’s all about the day-to-day trade rather than the long-term goals. And many women felt like they were being condescended to. There are off-the-charts levels of dissatisfaction. The industry, when I was in it, would literally talk about women as a niche market. You aren’t going to put the same investment effort into a niche as you would another client.”

Ellevest assesses the particular goal a woman has and makes recommendations based on the relevant factors of her income, education, savings, etc. The plan will mix stocks, bonds & alternatives to reach specific, individual goals.

One of the most important things women investors can do to start overcoming the system is to educate themselves and get started rather than continuing to be hindered.

Ashely Feinstein Gerstley of The Fiscal Femme told entrepreneur.com, one of the biggest mistakes women make is never trying to get into the market. She was noted as having said, “There’s so much information out there about investing, it’s hard to know where to start. Not to mention, investing jargon can sound like a foreign language and the idea of losing any of our hard-earned money can feel like reason enough to stay away. We lose so much more by keeping our longterm savings in cash which actually loses value over time. If you feel paralyzed about where to start, ask for help and then start.”

For more information about women investing in the stock market, please, read Closing the Gap: How Women Should Save and Invest for Retirement.


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