What's Driving Women's Investing Trends?

MARK RIEPE: I'm Mark Riepe. I head up the Schwab Center for Financial Research and this is Financial Decoder, an original podcast from Charles Schwab. It's a show about financial decision making and the cognitive and emotional biases that can cloud our judgment.

Welcome to our new season of shows and we're glad you're listening. Schwab did a survey of 1200 female investors earlier this year that I found interesting for many reasons. And rather than do a long intro into the topic, I think it's best just to jump right into the interview. But keep in mind that this episode isn't just for women for a couple of reasons. First, all of us have women and girls in our lives—partners, daughters, granddaughters, nieces, friends, etc. Second, good investing practices are just good investing practices and are useful for pretty much everyone.

Jeannie Bidner is my guest. Jeannie is the head of the branch network here at Schwab. She oversees nearly 400 branch locations in 48 states, as well as the centralized national branch teams. She has her Certified Financial Planning designation, is an executive sponsor for the Women's Interactive Network at Schwab, and she writes for Schwab's Money Talk column that helps people navigate common financial topics and situations.

Jeannie Bidner, welcome to Financial Decoder.

JEANNIE BIDNER: Thank you, Mark. Great to be here.

MARK: Yeah, it's great to have you because we're here to talk about a survey that Schwab did and maybe let's just start at the beginning. What were some of the key questions that it was looking to answer?

JEANNIE: Yeah, absolutely. So I think at its core, the survey really aimed to understand how women perceive themselves as investors, what motivates their financial decisions, what barriers they face. We really looked into some generational differences and investing behaviors, as well as emotional connections to money. So I think one of the most striking questions was whether women consider themselves investors and why or why not, which I'm sure we're going to get into.

MARK: Yeah, those are some of the more interesting parts as well as the generational differences. You're right, we'll get to that in a second. Before we get into the details here, how was the study carried out? Who were we talking to during this survey?

JEANNIE: Yeah, so the survey polled 1,200 US women between the ages of 21 and 75 who sort of self-identified as either primary or joint financial decision-maker in their household. Participants had to have at least $5,000 in investable assets, excluding retirement accounts and real estate, so true investment assets. And we conducted the study in two waves. 

The first was a little bit more general in nature, and then the second wave focused much more deeply into those generational differences. 

MARK: So it's a pretty broad swath of women who are involved in this survey. That's what I'm taking away from that. Right? 

JEANNIE: Correct, correct. And that was by design, right? Because we wanted to be able to really dig into some of the patterns and trends and have enough information that we could do some compare and contrast.

MARK: So let's talk about just sort of big picture level. What were the main takeaways when you started looking through the results? What really stood out to you as like, boom, this is what we really learned from this?

JEANNIE: Yeah, mean, by and large, I think we saw some really encouraging trends. Women are not only feeling more empowered and confident about investing, but they're also getting started earlier and earlier, and they're staying engaged and feeling really optimistic about their financial futures. 

So as we look into each of those as it pertains to empowerment and confidence, we saw both on the rise. 91% of women investors say that managing their investments makes them feel empowered. 83% say that they actually enjoy investing, which is great. And 90% of women surveyed said that they feel on track to meet their financial goals, really speaking to that level of confidence. 

And then in terms of getting started earlier, although overall 85% said that they wish they would have started investing sooner, we are seeing a trend of women getting invested earlier and earlier. On average, across all women, they began investing at age 31. But if you break down by generation, Boomer started at 36, Gen X started at 31, and Millennial women are starting at age 27. So you're seeing this trend of getting started earlier and earlier. 

And then the last big takeaway is really diverse motivations for that start to investing. So when you asked when we surveyed Boomer women, they told us their primary motivation for investing is retirement, which makes sense, while Millennials are driven by empowerment and curiosity. And a lot of them said that they started investing just for fun. So Millennials are also more likely to explore some of the non-traditional investment types like crypto and options and alternative assets. So you're just seeing these sort of major trend lines pop as we dug into each of the generations. 

But overall, that empowerment is rising. We're getting started earlier and there's diverse motivations and more exploration in terms of asset types.

MARK: As I listen to you kind of talk about that, I think to a certain extent, the obvious point that you just can't use a broad brush to kind of paint everybody the same. A lot of different types of people here, a lot of different motivations, a lot of different experiences.

JEANNIE: Correct, yep, exactly. Yep, and I think we'll probably dig into that too, but I think as we think about different products, different solutions, different investment vehicles, different education types, different ways that women start to create communities to help support their financial decisions, all of these things are not one size fits all, and we have to be thinking about how we sort of appeal to the broad investment community.

MARK: What were some of the challenges that are still facing women when it comes to investing? Most of the takeaways show, at least from my perspective, it's a good news story as someone who kind of works in the financial services industry. But what are some of those challenges that are still out there?

JEANNIE: Yeah, you're right. We've seen a lot of progress as a society. But despite that, there still are some challenges and hurdles that women in particular face. Lack of financial knowledge was cited as one of the number one reasons why they're not getting invested or they don't get invested earlier. Also this mindset of not having enough funds to invest, not having excess money sitting on the sidelines to get invested. And then a general hesitation of just identifying as an investor. 

Even when they do hold investments, women are not sort of identifying as investor. You think about more broad-based trends like lower pay for women, career breaks for caregiving, which we know is still something that is a key challenge that women face, and also women live longer than men, so they need to plan for longer time horizons.

MARK: Yeah, I think the number here that I wrote down was 38% of those surveyed did not consider themselves investors, despite the fact that they actually do hold investments. How important do you think that is? Do you think it's important for women to see themselves as investors, regardless of how much expertise or how often that they're out there making a decision one way the other about buying or selling something?

JEANNIE: Yeah, I do. I do think it matters. The survey underscores that mindset matters. So seeing yourself as an investor isn't just about having a finance degree or trading regularly. To me, it's about owning your financial future. It's being in the driver's seat. And I think when women embrace that identity, they're more likely to engage and to learn and to enjoy and to grow their wealth over time.

In my role, I've seen women become increasingly engaged in investing over the years. And I personally am very optimistic that that percentage will trend lower over time with more women giving themselves credit and being engaged investors and identifying as an investor. I would also say women are actively consuming and sharing educational content as they grow more familiar with investing. And so I think that would lead them to sort of recognize themselves as investors.

And then despite how they identify themselves investor or not, I'm encouraged that 89% of women investors feel confident in their overall investment strategy. So they might not think of themselves as an investor, but they feel confident in the decisions that they're making as it relates to investing. But I do think it matters. That mindset is a big deal.

MARK: Yeah, I think if you buy a house, you're a homeowner, whether you like it or not, you are in fact a homeowner. 

JEANNIE: Yeah.

MARK: And there are some obligations and responsibilities that come along with that. You mentioned a few different things, a sense of community and the available information. What are the things you think can move that needle a little bit more to get people more into that, as you described it, that proper mindset?

JEANNIE: Yeah, I mean, I think the industry has a role to play. I think things like this that you're doing, Mark, by continuing to offer accessible resources and education and information, relevant products, as it pertains to education specifically, making financial literacy accessible and less intimidating, really breaking down some of the barriers and language and understanding and demystifying it, I think can help tremendously. 

I also think representation, seeing other women confidently investing, I think helps normalize the conversations. And then you mentioned community. I think we're seeing this trend towards younger women accessing their community, tapping into peer support and shared experiences as it relates to finance. And then tools—think easy-to-use platforms, personalized guidance—can, again, just sort of lower that barrier to entry. So think all those things can help move the needle as we go forward.

MARK: Yeah, I think you're especially right about the industry point about making the stuff relevant for people to see why it's important to them for those who may not be immediately inclined to have that mindset. I think this is really important. Was there anything that, and this is just a treasure trove of information in this survey, was there anything that really stuck out to you as unexpected or you found surprising?

JEANNIE: I mean, I think the biggest thing for me, going back to your previous question, was I was very surprised at just how many women over a third don't consider themselves as investors, even when they're actively investing. that disconnect between behavior and identity, I think, is just, again, a powerful reminder of how much language and perception shape financial engagement. 

But another sort of on the positive flip side surprise for me was the sheer strength of empowerment and enjoyment that women cite when investing. 91% feel empowered by investing, 83 percent enjoy it. These are really powerful motivators and perhaps stronger than what we might have expected and hopefully an indication for how much progress we're making. 

If you would have asked me what I would have guessed people's, if they felt enjoyed or confident or motivated by it, it would have been much lower. So the fact that we're in the 80s and 90s, I think is just a great indication of where we're going.

MARK: Well, I think another thing that comes out of this, and I've heard this from groups of older men as well, so I don't think this is unique to women, but talk to any older person and they will tell you they wish they'd started investing sooner. So what do you think holds them back?

JEANNIE: Yeah, as I mentioned, 85% wish that they would have gotten started earlier. And no surprise, I think once you start to see the power of compound growth, it can be a bit intoxicating. And you're like, why didn't I do this earlier? But the top reasons for what women cite as their top reasons for holding them back and not getting invested earlier is not feeling knowledgeable enough, not having enough money, as I mentioned before, a hurdle to getting started.

And also fear of making mistakes. I think going back to that confidence, and that's where I think community can really play a part in helping validate decisions, especially if you're talking to people that you trust. All of these are sort of deeply human concerns, right? They highlight the need for empathy, but also simplicity in financial education and services. And again, the good news is that women are recognizing these hurdles and are actively working to overcoming them.

And I think, again, through greater access to education and tools and advice that's helping women lean in and start investing earlier and more consistently, which is the other piece of that.

MARK: We'll return to Jeannie in a few moments, but right now I want to talk about some factors that influence not just women, but all of us. The survey found that almost nine in 10 women investors feel very or somewhat confident in their overall investing strategy. Having confidence in general is a good thing and helps us generate optimism and that helps us get out of bed in the morning. I think it's fair to say that as human beings, we need confidence to function.

In the financial realm, we become confident by acquiring knowledge and there are lots of ways to do that. For example, talking with a successful investor or a friend or a family member, reading books on investing, keeping up with markets for financial news, following financial experts, or learning in school. The Schwab 2024 Modern Wealth Survey found that a quarter of Gen Z, those are people who were born in the late 90s, said they have increased confidence about investing because they were taught about it in school.

Some people who lack confidence never invest, but confidence builds from taking that first step. Making your first investment, that is an act of confidence. Making a mistake, correcting it, and learning from it, that expands confidence. 

Community can be another source of confidence. Again, as humans, we need community. Support is important. We're social creatures and depend on others for survival. Community can encourage you to trust your gut, to take a chance, to chase your financial dreams. And if you've done your homework and sought quality advice and research, that's great. Younger generations are more likely to talk about money matters than, Baby Boomers. This builds community, and this kind of sharing can build confidence. 

Community in real life and on social media is great in many ways, but it can be a double-edged sword. Others can tell you all is well when it isn't. You can be overwhelmed by cheerleaders who aren't reliable. When I suggested to one of our team members here that we needed to talk about community, she said, "Too much community is a cult." OK, that's a little dark, but there's some truth there. Beware of uniform thinking. If everyone is always agreeing with your investment choices, watch out. 

So how do you look at communal support with a critical eye? After all, it feels really good to be told you're right. You have to be willing to probe. It might be uncomfortable, but it's important. Give permission to your community to tell you the truth. Be open to conflicting opinions. Seek out people you trust to point out the faults in your choices and your logic. You have to be willing to listen to those who disagree with you. It's critical to planning well and building a strategy that aligns with your goals. 

By the way, in the women in investing survey we're talking about, discipline is one of the top strengths, defined as "Stick to a plan and avoiding emotional or impulsive decisions." It helps you avoid unwise investing choices. Another benefit of community is once you make a carefully considered decision, you can use your community to help you stick to your plan. 

And now let's hear more from Jeannie about women in investing.

Jeannie, you mentioned community a couple of times. What do you mean by that? Define that term a little bit more deeply, and how do you see that as a positive force?

JEANNIE: Yeah, at the end of the day, community fosters confidence. So whether that's through online forums or a financial workshop or informal conversations with friends or family, I think women generally learn best when they can ask questions and share stories and see others like them succeeding. So it's not just about finding information, accessing information. It's really about that connection and using finance and investing as a way to connect. I think that validation helps them overcome some of their fears and concerns over time.

MARK: Do you see any, I don't know, sort of big picture social trends that are kind of influencing some of those numbers you were sharing earlier about how as you move from older to younger, you see some, in some cases, some stark differences in participation? What's been driving that?

JEANNIE: Yeah, I think our social trends around social media and joining different forums to learn and lean in through online workshops and that kind of thing. I mean, there's definitely a social trend toward that. We saw in the survey, Millennial women are twice as likely to participate in investment clubs or communities compared to older generations, as you mentioned. Meaning they are actively discussing financial topics with friends and then they leverage social media for financial education. 

So you can see how there's this trend towards using the information and digital tools at our fingertips. That will obviously just continue. We also saw nearly two-thirds of women regularly talking about finance with others, again, whether to learn or support or validate decisions. These conversations are just helping to normalize the financial discussions and build confidence.

MARK: These are some notes I kind of jotted down here. The majority of Boomer women worked with a financial professional when they first got started. The majority of Gen X were guided by family and friends, something you also referred to. Then it was like 48%, or something like that, of Millennials got started with online resources and tools. So there's no one right path for everybody. So what are some of the kind of strengths and weaknesses of those different approaches?

JEANNIE: Yeah, I think this evolution really reflects how access and trust have shifted in our industry. And technology, in large part, has democratized investing in a lot of ways. But it also means that guidance, and as we think about what guidance means, it must evolve to meet people where they are. Guidance used to be going and talking to your financial advisor. That was guidance. Now you can get guidance digitally or through a number of different… from friends and family or a number of different online sources. 

So I think benefits overall, obviously lower barriers to entry, greater autonomy and flexibility, access to wide range of tools and information. I think obviously with any kind of technology there's downsides. There's the risk of misinformation. I think overconfidence without potential financial knowledge of just sort of trusting and not having enough resources to be able to gut check what you're getting, the information that you're getting. And then there also is a lack of personalized advice, right, if you're just leveraging online digital tools. 

So I think you mentioned this earlier, and I completely agree, the key is balance. It's not one size fits all. We should really be thinking about empowering women with tools while still offering human support or guidance when needed. So I think it's a little bit of all of the above. We can't just have one.

MARK: That's right. I think that's well said. So Jeannie, as I mentioned earlier, when we were just getting started out, you're head of the branch network at Schwab, about 400 branches, something like that, we've got around the country and a few other countries as well. And you've been doing this—I think you've been at Schwab about 15 years or so. 

JEANNIE: 19. 

MARK: 19, 19, OK.

JEANNIE: Actually 19 like next week.

MARK: Very good, very good. Maybe just tell me from kind of a personal standpoint what you've seen over the years. Is your kind of personal experience and what you've seen from our clients, do they reflect the survey results or is there something maybe a little bit unique from the standpoint of Schwab clients that you've seen?

JEANNIE: Yeah, it's been one of the most inspiring shifts to witness. And I've been doing a lot of reflection on this based on the survey results and going, "What were my conversations like early on versus conversations that I have today?" And when I first started out 19 years ago, conversations with women about investing were a little bit more cautious or timid, I might say.

Sort of women feeling like they have to justify maybe why they didn't start sooner or explain why they weren't really investors even if they had accounts. There was a little bit more hesitancy and the focus was usually on safety, how to avoid risk or how to protect what they had and most leaned heavily on financial professionals, really wanting that validation from a financial professional. 

Fast forward to today and it's a very different energy. Women are not just investing. I think they're really owning that. They're owning it. They're talking about it with more confidence. They're sharing strategies. They're asking smart questions. They're even teaching each other. They really want to understand. They're leaned in and they want to engage and be in the driver's seat.

So I think what's also changed is the tone. It's no longer about, "Should I be doing this?" It's now, "How can I do this better?" And so women are blending their own research. They go out and find their own information and education. And then they're blending that with advice from either friends, family, professionals, again, leaning into that community. So it's a really refreshing shift over the past 19, 20 years as I've been having these conversations. And even just talking with friends and family members, I've noticed it as well. So it's great.

MARK: Yeah, your financial life matters for all of us, whether you think it's important or not. 

JEANNIE: Right.

MARK: It is important and things will happen and better to have your hands on the steering wheel to a certain extent. 

JEANNIE: Yeah, exactly. 

MARK: Maybe final question here. Any other kind of big picture industry, societal or economic trends that you've been tracking that you think are particularly important for women investors to start thinking about?

JEANNIE: Yeah, I mean, I think this is for women. I'm sure, Mark, you've got your finger on the pulse, too, on this. But there's a growing appetite for more sort of values-based investing. So I think we've gone from a world where it was sort of quote-unquote "investment planning" to then a shift to sort of financial-goal planning to now we're shifting towards this life-goal planning.

And really thinking about what are my own personal values? What do I want to get out of this life? What are my goals, not just for retirement, but how I want to live? What vacations I want? What experiences do I want? And so thinking about investing with that in mind, and linking up these life goals with our investment decisions today and time horizons. 

I think there's also an increasing demand for transparency and trust. That's sort of always been in the background. But women are really leaning into that transparency and trust and asking really smart questions, expecting more from their financial partners. 

Even in my personal life, I have an 11-year-old daughter, and she's already asking… I was talking to her older brother about his investment account, and she's like, "Why don't I have an investment account that I put money in and I'd start investing?" So she really wants to get engaged and learn and she's already asking questions and seeing the power of that. It's great. I think that's some real progress when you have an 11-year-old who wants to get started investing.

MARK: That's fantastic. Jeannie Bidner is a managing director here at Schwab and head of our branch network. Jeannie, thanks for being here.

JEANNIE: Thanks so much for having me, Mark. Appreciate it.

MARK: I hope you got a lot out of my conversation with Jeannie. After all, how to pursue sound investing practices applies to everyone. We all want to be the best investor we can be. 

On a more somber note, one aspect of investing that affects women more than men is an unfortunate reality, and that is because women tend to outlive men. From a financial perspective, when one member of a couple dies, there are tasks that must be done at a challenging and sad time. And frankly, it doesn't matter how old you are, you can be affected by this at any point in your relationship. If you're in this situation, know someone who is or want to prepare for it in the future, Schwab has resources to help. There's an article on schwab.com called Losing a Loved One. It lists actions you'll need to take and other helpful resources. We'll link to it in the show notes as well as more articles that address this topic. 

And in general, you can find a ton of educational resources on schwab.com. You can find daily market updates and a slew of articles and information about investing the markets and more. You'll find interactive courses and curated experiences as well.

And that brings us to the end of this episode. Thank you for spending your valuable time listening and I'll be back in a couple of weeks. If you'd like to hear more from me, you can follow me on my LinkedIn page or at X at @MarkRiepe. That's M-A-R-K-R-I-E-P-E. 

And if you like the show, please consider leaving us a rating or review on Apple Podcasts or comment on the show if you listen to it via Spotify. We always like new listeners and if you know someone who might like the show, please tell them about it and how they can follow us for free in their favorite podcasting app.

For important disclosures, see the show notes and Schwab.com/FinancialDecoder.