The original version of this article first appeared in The Business Times

I don’t want pink products. The days of taking a ‘pink it and shrink it’ approach of feminising existing male products are over, and frankly I demand better from the financial services industry.

I want something that meets my unique needs, complex worries and life goals. Women have been driving change in the workplace, boardroom and the home. But there is still a long way to go when it comes to money and the deeply-held beliefs we as a society hold about it and how – and who – should manage it.

We need to probe deeper into traditionally accepted gender investment norms to close the investment gap. With a third of the world’s wealth under their control, women have become a sizable economic force. So going beyond gender investment biases is not just a gender equality problem, it’s actually a business problem, and more importantly a massive business opportunity.

Conventional wisdom is that men are risk takers and women are more risk averse when it comes to investing. The risk tolerance of male clients is higher than female clients’ on our digital wealth management platform, where risk tolerance is a key factor in determining the advised asset allocation of clients’ portfolios.

At the 50th percentile, our male clients have a ~40% 12 month drawdown tolerance, versus our female clients at ~35%. But there are academic studies, and insights published on our own platform Endowus, that suggest the truth is more nuanced and may perhaps be rooted more in confirmation bias.


A study conducted by the German Institute for Economic Research found that while men had a higher percentage of their portfolio invested in riskier assets, further regression analysis showed that women would have taken more risk if they had more money, where the level of income was correlated to the level of risk tolerance.

Merrill Lynch research also suggests that men and women may be significantly more similar in their investment behaviour than many assume. Differences that occur appear to be shaped more by social and demographic factors, such as education, employment status and financial circumstances, than by biological differences. Interestingly, it is the reported level of financial knowledge that made the largest impact on investment behaviour between the genders.

Given the existing disparity in financial knowledge and the gender pay gap, it is unsurprising that more female investors identify as being more risk averse compared to their male counterparts. All these contribute to underrepresentation of women in the financial services industry. But how risk averse people think they are and how risk averse they are in practice can be two very different matters, especially when context is taken into account.

Research conducted by Harvard Business Review found that women were more likely to take risk when their decisions had social as well as financial impact, or what they deemed as ‘social’ risk. In impact investment firms where maximizing social impact is a deliberate outcome, a higher proportion of women in top management took significantly more risks in their investment decisions.

While the causation behind this aspect of behaviour may not be reduced to a single factor, it does resonate with wider social research that women seem to prioritise the welfare of their community over individualistic pursuits. This finding becomes especially important with the growth of ESG (environmental, social and governance) investing beyond the fringe of finance as more and more people seek ethical returns that take a company’s environmental, social and governance factors into consideration.

It seems that greater representation of women in the financial services industry can be a win-win for all involved. After all, a world that values sustainability and harnesses the strengths of its people, both men and women, is surely one that is worth working towards.

Even if gender investment behavioural differences are overstated, and women are more risk aware rather than risk averse, the investment gap remains a very real problem, exacerbated by the pay gap, caregiver’s toll and the implications of child-bearing on careers.

The pay gap for  women in Singapore leaves them earning 16.3% less than men in 2018 when comparing the median pay, and 6% less when adjusted for factors such as industry, occupation, age and education.

Women are more likely to take career breaks or take on the role as caregivers, which unfortunately can still limit career progression, and women’s salaries peak earlier. When it comes to creating financial products for women, these are the real factors that need to be taken into consideration rather than whether the plastic should be pink, and if a 3% cash-back should be for the department store instead of the petrol station.

The real risk at the end of the day is not only market volatility, but the inability to achieve their long-term goals because of these systemic differences and ultimately, fall short of living the life they want. This makes investing even more crucial, especially as women statistically outlive men.

As the world celebrates International Women’s Day this month, an important event to honour  women’s achievements and recognize the need for a gender equal world, remember that one of the best ways to celebrate International Women’s Day is to rethink gender stereotypes, take control of your money, and close the investment gap.


Get a head start on financial literacy & general investing by watching our Investing 101 with Endowus 4-part series here.