Should Women Invest Differently Than Men?Should Women InvestDifferently Than Men?Women, on average, live five years longer than men. They make, on average, 21 percent less than their male counterparts, they take more “career breaks” than men do, and their salaries peak much earlier — at age 40 versus 55. When you take these factors, and others, into consideration, a woman will retire with substantially less than her male equivalent even though she’s more likely to live longer. It’s a no brainer — the short answer to “should women invest differently than men?” is a resounding, “Yes!”The Status Quo“We often read about the gender pay gap that affects women; much less well-known is the gender investing gap,” said Sallie Krawcheck, the co-founder and CEO for Ellevest, an investing firm that caters specifically to females. “Investing less than men can cost some women just as much as the pay gap over their lives. While most big investing firms have ‘women and investing’ programs, most of them have missed the mark. In my opinion, it’s because they all tried to market to women, not to serve women.” Currently, 86 percent of investment advisors are men, which translates into a clear lack of the female perspective in a field that affects the sexes equally. Krawcheck founded Ellevest to fill a clear need in the investing market, and the firm has gone back to the very basics to carefully examine, question, and alter the status quo. Along the way, they’ve discovered that women don’t care about outperforming the market, which is the traditional investing goal. Instead, they care very deeply about planning for their goals and investing to reach them. Susan Conrad, the chief client experience officer and an advisor at Plancorp, has worked in the investment space for 25 years and is particularly knowledgeable about goals-based, purpose-built investing. She agrees with Krawcheck regarding a woman’s investment goals versus a man’s. “Women want to feel secure, to know that they are not going to outlive their money. We often set family related goals, such as paying for children’s college or assisting with a down payment for their first home and leaving a legacy for the next generation. Men, in contrast, are often focused on investment performance and trying to hit a number that they think reflects success,” she said. Neither is an inherently wrong approach, but Conrad added that “as advisors, we should address the information needed by our clients. I think it’s imperative for an investment strategy to be based upon a financial plan that includes the personalized goals and dreams of each client.”Sallie Krawcheck. Photo courtesy of GirlbossChanging the Investing TideA woman outliving her retirement fund because an investment manager assumed a man’s lifespan, or didn’t account for other female-driven variables, can be catastrophic. And the fact that women are investing less than men, on average, is a sign that the industry hasn’t been doing a great job serving the female market. Clearly, real change in the investment world is needed, and we’re on the cusp of a tidal shift thanks to female-driven companies like Ellevest, and advisors like Conrad.In addition to taking into account obvious changes (such as longer life spans, pay disparity, and salary peaks), subtle findings are being accounted for. “[For example], women won’t invest in what they don’t understand, while men will. Women are not more risk averse — as so many believe — but are more ‘risk aware.’ That means they want to understand the risks they are taking, and once they do, we have found that they are willing to take them,” said Krawcheck. “We built a proprietary investing algorithm that helps women choose their goals, make trade-offs among their goals, and put together an investing plan to reach their goals. If the client falls off track, we provide her with personalized tips for getting back on track.”Conrad added, “Over the next decade the largest wealth transfer in American finance history will occur. It will affect women, their children and millennials more profoundly than any other demographic. Add to that the fact that 70 percent of buying decisions are made by women, and you can see why it’s so important for advisors to understand women and address their concerns.” Wendy Rose GouldWendy Rose Gould is a reporter based in Phoenix, Arizona. She covers women’s lifestyle topics for numerous digital publications, including Refinery29, InStyle, xoVain, Headspace, PopSugar and ModCloth. You can learn more about her at WendyGould.com.