March 7, 2024

Bridging the Gap: Women Shaping their Futures… with Finance | Part 1: Women in Finance Today

By: Sara Dotterer


At Ricciardi Group, it’s no surprise that we love promoting and empowering the success of women. We are female founded and the majority of our team is female. We are also an agency that focuses primarily on the branding and marketing of financial services companies. Over the past decade, “gender pay gap,” “women in finance,” and “power of the purse” are increasingly buzzwords we hear, but what is the state of women in finance today?

First, let’s go back to just 49 years ago. It was 1974 and the Equal Credit Opportunity Act was passed in the United States. This Act meant women could open a bank account on their own for the first time. Before this, women quite literally had to rely on their fathers, and then husbands, for financial power. Over 49 years, women have made enormous leaps. Women are more independent than ever before. They can be who they want to be. They are CEOs and entrepreneurs. They own houses. Around 25% more women graduate with doctorate degrees. 

Today, 23% of marriages have a husband who is the sole provider, compared to 49% in 1972. 16% of opposite-sex marriages have wives who are the sole or primary breadwinners, roughly triple what the figure was in 1974. As for raising kids, 77% of Americans believe that children should be raised equally by both spouses; however, studies show, women who work full time (even breadwinners) spend one hour more on doing household labor or caretaking than their spouses. Women’s confidence in financial control and decision-making is also increasing. 59% of women feel secure and do not worry about money. Despite feeling underserved by financial advisors, 59% of Gen X women say they fully take the lead in financial decisions of which many will soon-to-be inheritors of the “Great Wealth Transfer” currently underway. 


But, there is still work to be done. 

Women earn 84 cents for every one dollar men make. This disparity increases for women of color, 60 cents for African American women and 55 cents for Latina women for every dollar earned by white, non-hispanic men. Various factors contribute – namely, the unpredictable hours of women due to caretaking as well as taking time off during pregnancy and maternity leave. 

Even though women are earning more degrees than men, women now have more student debt (66% of all student loan debt belongs to women). Women are likely to enter retirement with only 74% of the wealth accumulated by men with pay gaps and delayed career progress as the primary drivers for this reality. Throughout their lives, women earn 21% less income than men, even though women live longer, and on top of that, have around 25% more healthcare costs. Women are also subjected to the “Pink Tax,” not only things like feminine hygiene products, but more so high-priced products that are specifically designed for and marketed towards women. Anti-aging products. Razors that cost $2 more than men’s simply because they are for women. Make-up. The list goes on. 


How can we close the gap?

If the gender pay gap does not dissipate any time soon due to the various barriers that exist, what can we control? Financial literacy and investing. Literacy creates confidence and confidence leads to risk taking– in this case, investing. 

Women earning money are more likely to place that money in a savings account (less than 1% interest earned) versus men who are more likely to invest that money (on average 10% interest earned). As teens, girls report similar knowledge on basic financial concepts, but are less knowledgeable about researching investments (36% girls vs. 44% boys) and trading stocks or ETFs (25% girls vs. 32% boys). Girls are socialized to be cautious and this translates to 21% of girls feeling overwhelmed or nervous by finances (vs 16% of men), while boys are socialized to take risks, with 26% of them feeling confident about finances (vs. 20% of girls). This socialization is crucial because it continues into adulthood. 

In reality, the perceived risk of investing is actually way less than not doing so at all, and moving into old age without investments to lean on. If women invested at the same rate as men, there would be an extra $3.22 trillion AUM from private individuals. On top of that, when women actually do invest, they get better returns than men (1% vs. .4%).


So now what?

As an everyday consumer, no matter your gender, improvements can be sparked by spreading knowledge and making incremental changes as soon as possible. Educate boys the same way we do girls about saving and investing. Share investing resources with female friends. 

As a financial institution, there is a massive opportunity of untapped wealth if you can better understand the barriers women face and meet them where they are to help bridge the gap. Companies like Ellevest were founded specifically for this investor after finding that 62% of women feel that their unique investment needs aren’t understood by most advisors. Ellevest designed its offering with all of the above statistics ingrained into its investing DNA. In other words, build your offerings with women’s needs baked into them and speak directly to their needs and goals as they enter or expand their presence in the world of investing.


For more insights on the wealth management space, visit our new research report “Money Changes Everything: The Evolving Global Wealth Landscape 2024.”


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