Golden Girl Finance editor-in-chief Rita Silvan talks to
Barbara Stewart about the “fake news” on women and risk.


Barbara Stewart CFA, is one of the world’s leading researchers on women and finance. She publishes an annual series of Rich Thinking™ research papers. Barbara has worked in the finance industry for 25 years as a portfolio manager for high-net-worth investors. Her most recent report entitled: “Smart Women and Risk-Taking” can be found here


GGF: Why did you choose to focus on women and risk-taking?

BS: Anger, anger, anger! [laughs] I was irritated by these old messages about women being risk-averse. Things are changing for the better but there are still a lot of powerful financial groups that are run by men who broadcast that women are “financially illiterate”. These messages influence how men and women behave in their personal lives. For example, men controlling the money. But it’s not the world it was 50 years ago.

GGF: There’s a big difference in the way that the financial industry talks about risk and the way that the average person understands risk.

BS: The traditional financial definition of risk is the percentage of assets allocated to equities. This is a very narrow definition. I focused my recent research on risk because that’s the hardest one. People are still saying that women are risk averse but we’re not, we’re risk aware. That’s a positive message. We’re reframing the conversation. My definition of risk is: When we’re not meeting our long-term objectives.

GGF: So, is gender a factor in risk behavior?

BS: No. Gender is not a factor in risk tolerance. We’re influenced by factors like our situation, (if we just lost our job, for example); education; life experience, and personality. It’s much more about the person, not the gender.


“People are still saying that women are risk averse
but we’re not, we’re risk aware.”


GGF: Why do we keep hearing about women lacking investment confidence?

BS: I’ve stopped asking women if they felt confident managing their money. These are women who are running multi-gazillion-dollar companies! We don’t ask men, “Are you confident?”

Now I focus on behavior and ask questions like, “Last year, what did you do with your money? What have you accomplished?” And the answers are, “I bought a house; I negotiated a deal…” When you ask about real life behaviors, you discover that the majority of women are fully competent. I’ve worked with women and men clients for the past 25 years and there’s nothing different about their portfolios. Women are not socialized to talk about money or to brag about how much money they’re making.

GGF: The financial industry is launching a lot of new products aimed at women. What are your thoughts?

BS: I spent the last year interviewing 60 ultra-high-net worth women in the Nordic countries and almost 100% of them only want to invest in ESG-related products. Gender equality investing is huge, for example. They told me that they would pay higher fees, if they had to, and give up return, but they don’t have to give up return because businesses with better governance perform better.

GGF: Women investors appear to be catalysts for global change for more sustainable and equitable businesses.

BS: Women aren’t so concerned with whether they get a 3.5% return or 3.8%. They would rather talk about their values and what matters to them. They want to put their money to work doing good versus aiming for some arbitrary rate of return. It’s a game-changer. Currently, the industry is missing the boat on this. For a woman, the investment has to be aligned with her values.


“(Women) want to put their money to work doing good versus aiming
for some arbitrary rate of return. It’s a game-changer.”


GGF: How should the industry change?

BS: It needs to broaden the conversation around risk. The current approach of having clients fill out a questionnaire about their risk tolerance is lazy. Risk is not just financial. Advisors need to get to know their client first— what kind of work does she do; what’s her life like—before making any kind of investment on her behalf.

GGF: What’s the one big thing idea that stood out from all the interviews?

BS: That women do not need to be talked or coddled into taking risk. There are all these women with money who are ready to invest in stuff that matters to them. If advisors want that money, the industry needs to change with the times and have broader conversations.

GGF: In your research, you asked each woman about the biggest risk she ever took. What was yours?

BS: It was in my personal life. Interestingly, only one out of 52 women I interviewed mentioned a relationship as her biggest risk. Maybe people are not ready to share information about that! We all know that our personal relationships can have a huge impact on our financial lives, like the woman who marries a guy who already has four kids.

The other big risk I took was to quit my job as a portfolio manager to high-net-worth investors to focus on doing this research. I had a highly paid job but I just had to do it. Once you start thinking about something, you can’t go back to the way things were. Now, I’m getting new work contracts which is great. But, when I left, I had no idea.