“The catalyst was about mid-2024,” says Stephanie Wilks-Wiffen from eToro, an online broker. That was when she read the annual Boring Money report. It showed that the gender investment gap had widened in the UK, with men making up almost 60% of investors. 

eToro then started developing its “Loud Investing” campaign, which aims to educate and empower women to invest. This is by far not the only initiative targeting women investors. 

Wilks-Wiffen has noticed a rise in female-led initiatives over the past six to twelve months across the industry. Online brokers are launching new brand campaigns, producing “female finance” podcasts or sponsoring women’s sports teams. 

“The more the merrier, in my opinion,” she says. “If our messaging doesn’t land with someone for whatever reason, maybe someone else’s in the industry does.”

Women have long been underrepresented in the world of investing.Today, men own about two thirds of stocks issued on the stock market. Women still face many barriers to investing. They generally earn less than men, which leaves them with less money to invest in the first place. They do not receive the same financial education in their childhoods, which leads to lower financial literacy in later life.

Women have also historically been excluded from the finance sector. In the UK, for example, women were barred from the trading floors of the London Stock Exchange and faced widespread discrimination in accessing financial services until the mid-1970s, with banks requiring a father’s or husband’s consent even to open an account.

Changing the narrative about women investors

“It’s a simple shift in rhetoric,” Wilks-Wiffen says. “We need to use language that celebrates women’s strengths, like patience and discipline, and create an environment where women feel comfortable.”

For example, eToro is featuring more female presenters in its online educational content and addressing the psychological hurdles that first-time investors face.

Highlighting data on women being capable investors also increases their appetite for investing. The financial industry often echoes reports on how women’s risk-aversion and lacking confidence are holding them back.

“If we treat people like stereotypes, eventually we risk them becoming the stereotype,” says Professor Ylva Baeckström, a senior lecturer in finance at King’s College London. She says there is too much emphasis on women’s under-confidence, when really, “it’s over-confidence that kills performance.”

According to her, men are more likely to lose money through short-term trading and overconcentrated risk-taking than women. “When women do invest, they often outperform men,” says Baeckström. A study by Warwick Business School found that women outperform men at investing by 1.8 percentage points.

Women also have different investment priorities. They invest more sustainably than men and are more likely to consider ESG factors. “So, women just really think about their money in a very different way. Yet, we’re not seeing those needs being served,” says Christine Yu, co-founder of the financial education company Sophia.

Women are also more likely to seek financial advice than men, especially when entering a new life stage, like planning for children, divorce or widowhood.

Financial incentives for this shift

Online brokers also have a financial interest in integrating women into their customer base. 

“Increasing women’s investment participation rates is one of those win-win-win scenarios,” says Baeckström. According to the World Economic Forum, the financial service industry (which includes banks, brokerages and credit card companies, for example) could increase its revenue by $700 billion if it catered to women better.

Women’s wealth is also projected to experience rapid growth over the coming years, especially in Asia. One reason is that women are gaining assets through the ongoing intergenerational wealth transfer, as baby boomers pass on wealth to their children.

“This is an opportunity for the financial service industry,” Baeckström tells DW. “They need to improve their services to women, because otherwise women will walk away, and they often do when they inherit wealth.”

This only applies to a small segment of people who are already wealthy enough to invest. While around 60% of the US population claim to invest in stocks, many countries record a much lower participation in the stock market. In Germany, stock investors account for around 20% of the population, and in India around 5% of households invest in the stock market.

Finfluencers also target prospective female investors

Online brokers and investment platforms are not the only ones waking up to this opportunity. The last few years have also seen a rise in financial influencers, or finfluencers, and online investing communities, many of which target women specifically. “What does that tell you? It tells you that there is a need that is not being met,” says Yu.

The spread of financial advice online also bears risks, given the lack of accountability and regulatory oversight. This makes people vulnerable to misinformation and scamming.

Steps towards bridging the gender investment gap

So how effective are online brokers in reaching out to female investors? And are women becoming more involved in the stock market?

The gender investment gap is indeed smaller among younger generations, says Leah Zimmerer, a postdoctoral researcher at the University of Mannheim. The German Stock Institute confirms that this is the case in Germany. In fact, more women started investing in the stock market than men in Germany last year. But, in absolute terms, only 5.4 million women invest in Germany, compared to 8.7 million men.

Younger generations are also more receptive to online brokers. People between 18 and 30 years old are more likely to invest, Zimmerer says. According to the German Stock Institute, under-40-year-olds are the age group with the most investments in the stock market in Germany. And according to JP Morgan, participation in the stock market among American 25-year-olds rose from 6% in 2015 to 37% in 2024.

As young people grapple with inflation, high cost of living and worries about the security of retirement benefits, they are increasingly taking matters into their own hands. Financial markets have also become more accessible through investment platforms and information online. Especially since the Covid pandemic, eTrading apps like Robinhood, WeBull or Fidelity Investments have experienced a surge in downloads.

Young women still invest less than young men

However, experts caution not to draw quick conclusions.

Young women investing more does not necessarily mean they will continue to do so throughout their lives, Zimmerer says. The gender investment gap widens with age and is largest when women are between 40 and 50 years old. That is the period when women are tied into family life and are less likely to manage their own finances, she says.

Later, when women experience divorce or widowhood, for example, the gender investment gap becomes smaller again. It’s unclear whether Gen Z women will continue investing at higher rates as they get older, or if they will mirror the life-cycle pattern of previous generations instead.

Baeckström is equally skeptical. “We can’t be comfortable in the possibility of a short-term trend becoming a long-term phenomenon,” she says. “We need to make big improvements in order to level the playing field.”

Edited by: Srinivas Mazumdaru