Women and investment management: Unlearning patriarchal tropes
It’s that time of the year when goddess Lakshmi, in all her splendor, will be perched on ornate pedestals in Indian households. The dichotomy though, of seeking the blessings of a female mythological figure for everlasting prosperity and the lopsided participation of women in investment matter is age-old.
The dynamics of gender politics in households and families are intricately entwined with the management of finances. Blame it on the deep-rooted patriarchal conditioning or the general lack of emphasis on financial literacy in the education system whose trickle-down effects impacts women more than men – the realm of investment management continues to be testosterone driven.
Although, traditionally women have been adept at managing household budgets but most women have rarely had the leverage or the mindset that is conducive to managing investments and making major financial decisions. In fact, until a few years ago, for most women, financial inclusion was confined to holding joint accounts with their husbands. Women themselves tend to relegate the task of investment management to the male members in the family because of the old line of thought that men are better equipped for investment management.
A long road ahead
However, a change is afoot and more and more women are realizing the importance of being in charge of handling finances. Elora Chakraborty, a doctor based in Kolkata, is in charge of her family’s finances – from budgeting to paying bills to making long-term investment plans, she has been calling the shots for a while now. She narrates, “Things were different till a few years ago. In the early years of my marriage, even though I had my own income, I wasn’t privy to where my husband was investing. The indifference was because of the ingrained perception that investment matters should be left to men. It was only when my daughter reached adolescence that I realized that financial literacy is as important as financial independence for women – what is the point of earning investment if you don’t know how to use that investment to empower yourself! That’s when I started participating actively in finance management and thankfully, my husband never tried to keep me away or made me feel that it his bastion exclusively.”
However, women like Chakraborty are not the majority. The number of women who participate in decisions continues to be abysmally small because of low financial literacy. Data from the 2017 Global Financial Literacy Excellence Center study on gender gap in financial literacy revealed that only 20% of women understood financial concepts - a lag of 8 percentage points compared to men.
Arti Wadhwa Bhalla, a partner at InCred Wealth who is also a member of Confederation of Indian Industry – Indian Women’s Network highlights how traditionalistic perceptions of wealth management deter women’s involvement. She says, “Wealth management is like management in any other field. It is about setting your goals, devising the best possible strategy, implementing it, and then regularly monitoring it. It is not as complicated as it may seem. In my banking experience over the last 25 years, I have seen that in most families, whether it be business or working professionals, financial decisions are left to the men – fathers, husbands, brothers.”
Financial literacy an imperative
It has been statistically proven that women live longer than men, which means that for many women living longer than the male members of the family who chart the course of their financial health is a real possibility. Being cornered into a situation where women have no chance but to learn the nuances of personal finance from scratch can be a herculean task especially if there has been a dwindling in income and there are dependents. An experience like this was what forced Simran Modi to educate herself on budget management tactics at an early age.
“I come from a middle class family wherein my parents bore traditional gender roles – my father was the breadwinner and my mother looked after the household and me and my sister. I don’t remember any instance where my mother sough my father’s inputs before making any financial decision. I can only recall my mother diligently signing papers that my father asked her to without reading them. She never took the initiative or felt the need to and neither did my father think about a situation where she would be let alone to fend for the family. That is exactly what happened – he died suddenly and the financial troubles that ensued for my mother and us were a huge lesson for me. Since then I have been managing all investments for my family even before I started working,” she narrates.
The Power of the Domino Effect
The first step towards breaking free of stereotypical notions that women are not wired to handle investment matters is by educating oneself. Modi jokingly says, “There is a semblance of gender equality in this regard because men have also been left out of the basics of personal finance in their early years. Thankfully, the internet has blessed us with a vast wealth of resources which women can tap into to educate themselves without having to depend on anyone else.”
The advancement made by one woman in terms of picking up finance management skills can play a crucial role in motivating other women. Bhalla explains, “During my client portfolio review meetings, I try to ensure that the lady of the house is present and participates in the meeting. Initially they may resist, however I try to spend some time educating them on the basics of asset allocation, goal setting and how to get good risk adjusted returns for the future so as to beat inflation. I feel happy when I see them take well-informed investment decisions. With women, the domino effect can be quite potent – sharing our experiences with other women and family members can push more women to take a lead in financial decisions of the family.”
This article is part of the HT Friday Finance series published in association with Aditya Birla Sun Life Mutual Fund