‘Having a financial plan is more critical for women than men’4 min read . Updated: 12 Oct 2020, 08:29 AM IST
- Financial plan for women has to make up for the gender pay gap, differentiated career peaks and life stages that slow down earnings, Priti Rathi Gupta, MD and promoter, Anand Rathi Share and Stock Brokers, and founder of LXME
The number of women mutual fund investors in India has seen a surge lately, upsetting the traditional idea that men handle big-picture tasks like investing and women do daily budgeting. In an interview with Mint, Priti Rathi Gupta, managing director and promoter at Anand Rathi Share and Stock Brokers, and founder of LXME, a financial platform exclusively for women, talks about what’s driving this shift and what the future holds.
Do Indian women lag behind their male counterparts when it comes to financial planning? Why is that?
In a country where only 14% of the population actively invests their savings, the statistics on women are even more dismal. Surveys suggest that only 33% of women take independent investment decisions as compared to 64% of men.
Women are raised in an environment where they are made to believe that investments and financial matters are complicated and a man’s domain. Thus, we usually depend on our partners or other male members of the family like our fathers or brothers when it comes to taking financial decisions.
It is only when faced with unforeseen situations like sudden death of an earning member or divorce when women really understand the importance of having a financial plan. But quite certainly, it is too late then.
What role do Indian women typically play when it comes to household finances?
The household day-to-day budgeting is almost always a woman’s responsibility, because of the traditional gender-specific roles.
According to DSP Winvestor Pulse, 2019, men dominate when it comes to investing or long term financial decisions like buying a car or house. Women on the other hand, have a larger role while buying gold or jewellery, day-to-day household purchases and durables. Financial planning for the family is always been a role assigned to the man of the house, oddly even in cases where both spouses may be earning members.
Why do you think there was a need for a financial planning platform dedicated to women? How does it differentiate itself from other similar platforms?
When we did primary research on why women shied away from investing, we realized that one of the key reasons was that the entire industry was talking to men, their goals and in their language. Finance and investment as a domain continues to be dominated by men. And this is where we want to make a difference.
A woman’s perspective, needs, goals and life states hugely vary from that of a man. The tools on the platform need to cater to all of this and ensure that decision making is easier as well as informed. It addresses challenges that are specific to women.
We have built not just a financial platform but an entire ecosystem for women to build their financial acumen and wealth.
The fact that you can begin investing in diversified portfolios in small amounts, makes it equally attractive to both working women as well as home makers who would otherwise keep small savings aside or in bank savings accounts.
Is there a need for financial inclusion and literacy efforts aimed at women?
While financial inclusion and literacy rates in India are very low for both men and women, it’s the urban women population that lags far behind the urban male population. There has to be a larger push towards making women financially aware and helping them with their money journey, given the changing lifestyle dynamics. Financial independence and freedom are the key enablers for all of these.
Women form 48% of our population and while the government has made substantial efforts via policies for financial inclusion of women, there is a gap when it comes to the knowledge, information and literacy reaching them. If even 10% of our women population takes on the onus of managing their money, we would see a societal change.
In your experience, are women typically more conservative investors?
Women have the right attributes to make for a successful investor. Goal oriented, disciplined and detail oriented, we take calmer and less emotional decisions than our male counterparts. This may be by some standards called conservative, as our style is more passive investing and diversification in order to mitigate risks.
Even Warren Buffet’s investing style has been often quoted as that of a woman. There is a wider sense of investing back in the society and their families for their better future, which highlights the kind of investment which women usually focus on over competitive investing.
Should financial planning look different for women than it does for men?
Financial planning is even more necessary for women than men. It has to meet and make up for the gender pay gap, our differentiated career peaks and life stages that slow down our earnings and last but not the least women live longer than men, necessitating robust retirement planning. Hence, at every age, the way we would invest would be quite different from a man of the same age.
Is there a larger market for women-oriented investment products and advisory that has remained untapped by the mainstream industry?
There definitely is a market for dedicated products, which go beyond just pure marketing tools. However, the real focus has to be on improving awareness before the product is thrust upon the market. As of now, the biggest need is to adequately communicate about the financial products to women in a relatable manner.
If our busy and actively engaged community of women who talk money, is anything to go by, then money will no longer be only a man’s forte.