Women's Day: 6 financial aspects that impact women investors (2024)

Variables that might impact women's participation

Shifali Satsangee, Founder & CEO - Funds Vedaa, believes that different variables impact women's participation in money matters.

Men hesitate to involve women in financial discussion

To address the hesitancy among men to involve their spouses in financial discussions, Shaili Shah, CEO at Purva Investments, actively advocates for family participation in portfolio reviews and educational sessions.

“We emphasise the unpredictability highlighted by the Covid situation, stressing that involving family members is crucial. We want the kids and spouses to be involved in financial discussions. We understand that they will not be able to understand anything on Day 1, but it will develop over time.

While we are not 100% successful, this approach has led to positive changes. Families are opening up to involving their spouses and children," she said.

Strategies to increase women’s participation

It is hard for women who have never taken any initiative to know about money and financial matters to jump into investments. Hence, the better way to start would be to focus on their mindset and make sure that they know about their husband's investment and insurance.

Importance of information and Will

Prathiba Girish, Founder of Finwise Personal Finance Solutions, believes that women should let go of the mindset that talking about money is evil.

“The first and very important thing is information. Women should know where their husbands have their investments, insurance policies, log in details, and advisors' contact details. The second aspect is creating a will. If the husband dies intestate, i.e. without the will, the property is distributed according to their religion. In the case of Hindus, the property is divided equally between the wife, their children and his mother. Having a will makes it easier for women to manage the household and look after the kids even when he is not around. So, it is important for women to make sure that their husbands have made a will," said Prathiba.

2. Investor awareness programs

Shaili Shah said that she has been deeply involved in investor awareness programs to increase awareness among women investors.

“I've noticed a remarkable comfort level among female investors. This reflects a positive shift in mindset and a greater openness to financial education. My approach prioritises education and empowerment rather than just pushing financial products. Women, in general, prefer a thorough understanding before making decisions, and this emphasis on education has not only boosted confidence but has also encouraged even the most hesitant clients to discuss their financial knowledge gaps," said Shaili.

3. Strategies to help investors continue SIP

Tejal Gandhi, CEO & Founder of Money Matters India, said millennials are very savvy about investments and big on investing in mutual funds through SIP.

“I see a lot of women investors who stop their SIPs when the market is not doing well. We ask our investors to shortlist three goals and invest in them for three years. After three years, we repeat the process. Our focus is on the long-term goal and ensuring the investor stays invested for the long term. However, making mid-term actionable strategies helps women investors implement the investment strategy and stay invested for the long run," said Tejal.

4. Activities for homemakers

Dilshad Billimoria, Managing Director of Dilzer Consultants Pvt Ltd, shared the general perception surrounding homemakers and the reality.

“People generally have the perception that homemakers are generally quiet and may hesitate to voice their opinions. However, in my experience, these women contribute practical solutions and valuable insights into financial matters. Their understanding of budgeting, expense prioritisation, and effective cash flow management is often underestimated, and they might have some fabulous ideas," she said.

Financial compatibility

Money is one of the major reasons behind conflicts between spouses. Hence, it is essential to make sure that both partners are financially compatible.

Bhuvanaa Shreeram, Co founder, House of Alpha Investment Advisers does an exercise with young couples called the 'Money Egg' to understand and deepen their financial compatibility.

Women in ultra-HNI families and the mindset of the other family members

Nita Shivdasani, Managing Director, Head of Heritage, Waterfield Advisors, shared that the number of women billionaires has increased, but work must be done to empower women.

“There are more women billionaires and entrepreneurs in India than ever before. The number of women investors has tripled in the past decade. In UHNI families, where women are well-travelled, the rate of progress is faster. These women are now contributing to households, family businesses, as well as the corporate landscape, and are getting more involved in the family’s financial decisions," said Nita.

“However, we are still at a very early stage of this transition and challenges persist. Lack of confidence and lower financial literacy discourages active financial management. We still live in a patriarchal society where many family patriarchs discourage women from taking charge of their finances. Hopefully, we stay on track and ensure that the next generation of women feel empowered to take control of their finances," she added.

Sraboni Haralalka, Co-Founder & Executive Director at Wodehouse Capital Advisors, said that more and more families are involving their spouses and daughters in the business, and they are holding key positions.

“Traditional, large families believe in bestowing large assets to daughters at the time of their marriage and gift assets only on specific social events. These used to be largely bestowed by fathers and brothers and subsequently managed by the male members of their husbands' family. However, increasingly, with smaller families and higher levels of education, parents are creating wealth pools that are lifelong for their daughters as well. The spouses and daughters are also being involved in the businesses and often hold key positions thereby partaking of the profits on an ongoing basis. We have seen large businesses being solely inherited and managed by daughters very successfully," said Sraboni.

Aarti Mohan, Principal, Aurion Advisors said that within the affluent segment, despite most women successfully running their businesses and philanthropic endeavours, their active involvement in managing the family’s financial assets is almost non-existent, with very few exceptions.

“One primary reason could be that historically, even as young girls, they have not seen their mothers play that role, nor were they encouraged to build knowledge/skill levels as part of their upbringing. Unfortunately, most schools/colleges do not address this basic requirement today. We see that younger families in multi-generational businesses are trying to involve and educate their children on the basic tenets of money management. There is a greater inclination to be more aware and hands-on with managing family assets," said Aarti.

Divorce cases

Most of the financial planners we discussed in this article said that they see women reaching out to those who want to go for a divorce.

Sraboni said that the family office could ring-fence their assets and ensure wealth preservation, growth and regular income as required on a long-term, sustainable basis.

Nita shared the importance of hiring experts to make the process easier.

“It is important to have a financial consultant along with a legal advisor when a woman is going through a separation. In this emotionally riveting period, even in the most amicable divorce, making wise and strategic financial decisions becomes difficult. Strategically planning alimony, navigating the division of joint-owned properties, estimating the streedhan, and investment objectives post-divorce are some crucial decisions that need to be backed by strategy rather than intuition. This is where the family office comes into the picture. The family office ensures the presence of governance structures, drafts a family constitution, and keeps family members informed about their financial situation. Furthermore, family offices engage with wealth advisors who help navigate the inherited wealth by guiding on investments as per the client's risk profile and advising on estate and succession planning," said Nita.

In conclusion, overall, financial planners shared that with the increase in women's participation in the workforce and having a source of income, women are now more interested in financial matters and take independent financial decisions.

However, there is still a long way to go.

Padmaja Choudhury is a freelance financial content writer. You can reach out to her at padmaja@padmajachoudhury.com.

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Published: 08 Mar 2024, 03:49 PM IST