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Help Clients Invest in Women This Women’s History Month with Gender Lens Investing

This story was originally published on May 15, 2024, by Financial Planning and has been edited for clarity.

Author: Kristin Hull

Women’s History Month provides a great starting point to evaluate the impact the work of the financial planning profession has on half of the population. With a significant wealth transfer underway, more and more women are coming into control of assets. This means financial advisors will do well by adding to their planning tool boxes in order to appeal to these clients. Women run funds, women in positions of leadership, as well as companies with products and services designed for women, will become more and more important. 

This shift makes a great case for weaving gender lens investing practices (GLI) into your investment process. So, how can financial planners take the first step to help their clients invest in women? 

Understanding the power of GLI 

Incorporating gender lens is more than another tool in the wealth planner’s toolbox: GLI is a unique investment strategy with effective and varied benefits for clients and advisors alike. Folding GLI into the financial planning process has the potential to increase financial returns and reduce risk. Using GLI as a practice can improve an advisor’s ability to connect with and retain current clients, as well as attract new clients. 

The concept of investing in women is not new, and there is exciting new evidence to support the approach. According to the 2024 Wells Fargo Impact of Women-Owned Business Report, women-owned businesses have increased 4.5 times the amount of male-owned businesses between 2022 to 2023.  

Finding different ways to increase the number of women in leadership positions, bolster women’s financial independence and support gender-specific initiatives is not just a U.S. phenomenon, it’s global. In a United Nations report “Empowering Women, Building Sustainable Assets,” as of July 2023, $56 billion of capital had been invested towards the UN Sustainable Development Goal (SDG) 5, an effort that broadly promotes socioeconomic gender diversity. We see this through pointed measures like Target 5.6A which “undertakes reforms to give women equal rights to economic resources, as well as access to ownership and control over land and other forms of property, financial services, inheritance and natural resources” and 5.6B which “enhance the use of enabling technology, in particular information and communications technology, to promote the empowerment of women.” 

Yet do enough clients and advisors alike understand the opportunity?

Advisors Can Position this Opportunity Appropriately 

If you asked me to categorize the next year of challenges and opportunities for GLI, I only see an upside. 

A common theme in the financial planning profession over the past decade has been finding ways to connect with female clients, honor unique wealth building journeys, and increase the lines of communication with clients.

From my experience, women investors  strongly identify with portfolios that include women in leadership. Women see and understand the research underscoring the benefits of diversity in leadership, and want to align their investment dollars with this approach. I’ve also seen that women investors identify with portfolios that include companies whose products and services are designed with women in mind.

On the flip side, in my experience as an asset manager, I have found that most female clients do not want weapons producing companies included in their portfolios. Women do not want to benefit financially from companies supporting conflict or violence whether that is here in the U.S. through weapons producers or in wars abroad. 

Start With an Alignment of Values

Fortunately, there are some easy and straightforward ways to engage clients in GLI conversations. Advisors currently catering to, or designing portfolios for, women clients have a key opportunity already in hand. Open up new points of connection by discussing their views on women in leadership and products or services designed with women in mind.

Listening to clients and sharing that you as an advisor see and understand the trends – that across asset classes, from cash, to fixed income to private and public equities – GLI can be a strong strategy for increased return on investment (ROI) and a way to de-risk an overall portfolio. 

Here are some ways to aid your clients in taking the leap: First, measurement matters. Clients can make the conscious decision to select portfolio companies that include women in leadership, either in executive management or on the Board of Directors. 

Offer to provide an analysis of a client’s fund team’s structure. Highlight women portfolio managers, asset management firms, and founders. This step will provide clarity about who is actually making investment decisions about their money. With women-owned asset management firms managing just .7% (yes, less than 1%) of assets, selecting funds run by women can be a great way to diversify portfolios while incorporating GLI. Similarly, access to capital remains a critical barrier to women founders, so determine if a client's money is currently investing in female founders directly. Lastly, to the extent possible: emphasize the power in shareholder proxy voting with a gender lens! Let clients know they have a voice (both a right and a responsibility) in determining corporate policy.

With several recent Supreme Court decisions and those at the state level, gender lens issues are in the news and have become dinner table conversation. It is not lost on many that there are men in power looking to regulate women's bodies. It is no surprise then, that women are looking to have an effect across all of their actions. Employing GLI strategies can be a key way to activate their investment dollars—both for de-risking portfolios, as well as for a way to vote with their investment dollars for the leadership and for a gender balanced economy.

GLI is an undersung and underutilized way to connect with clients. Starting this Women’s History Month, commit to folding GLI into conversations and watch the client relationships and their financial returns flourish. 

Important Disclosure:  

The views presented here are those of Nia Impact Capital (“Nia”) and these views may be subject to change. All information is obtained from sources believed to be reliable, yet Nia does not certify the accuracy or completeness of this information.This article does not constitute an offer to sell, or the solicitation of any offer to buy any security. All investments carry risk. An investor is strongly advised to consult with their investment professionals prior to making investments to ensure that they understand any associated risks.


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