A 2021 survey by Fidelity Investments found that women tend to have less confidence in their investment knowledge, with only 19% of women feeling confident enough to select investments that align with their goals.

And while years of research have shown that women hold more cash than men, women still take fewer risks in the market and worry more about meeting their retirement goals. The Fidelity report also found that just 33% of women see themselves as investors, while only 42% are confident in their ability to save for future milestones.

The investment gap should be a significant issue for everyone ­– if women aren’t able to accumulate and grow their wealth as quickly as men, they’ll fall short of achieving their long-term retirement goals. The fact that women have a longer life expectancy than men also puts them at greater risk of financial insecurity in old age. Investing can be an important way for women to take control of their financial lives and by not participating in investing, women maybe missing out on opportunities to contribute to the economy and their own wellbeing.

Even women with available capital to invest face several barriers to becoming successful investors. That includes:


Lack of representation

Women are underrepresented in the financial services industry, with a Barron’s report1 finding that just 23% of advisors in Canada are women. As a result, female investors can have a hard time finding advisors, mentors and role models who understand their financial issues firsthand.


Risk aversion

Studies consistently show women to be more wary of risk than men when it comes to their finances. This can be a good thing at times, protecting them from overconfidence and making reckless moves that lead to capital losses. But over the long term it can constrain returns if, for example, they steer clear of proven, though potentially risky, assets like stocks.


Time constraints

Often saddled with the bulk of caregiving duties in the household on top of paid work, women may lack the time to devote to researching and managing investments.


Focus on household finances

Called upon to manage household spending, women may prioritize the current financial needs of their families over their own longer-term investment plans.


Lack of financial education

Women may have less exposure to financial education and resources than men, which leads to lower financial literacy and less confidence in their ability to make their money grow.

So, what can women do in the face of these obstacles?


Start investing early

Don’t put investing off until you reach some imagined milestone like getting married or owning a home. Thanks to the magic of compounding, even small amounts invested in your 20s can grow to considerable sums by the time you retire. If you double your money every 10 years – a not-unrealistic goal – that $1,000 you set aside at 25 will be worth $16,000 at 65. The same money saved at 35 will be worth only half as much.


Use tax-advantaged registered accounts

The Canada Revenue Agency offers tax breaks in certain wealth-building investment accounts. If you’re saving for retirement, consider the Registered Retirement Savings Plan (RRSP), where money is only taxed when you withdraw in your golden years. For a child’s education, there’s the Registered Education Savings Plan (RESP), where withdrawals are taxed in the student’s hands. If you’re buying a home, consider saving in the new Tax-Free First Home Savings Account (FHSA), where your money is not subject to any tax or the Tax-Free Savings Account (TFSA), which also does not come with a tax hit when you withdraw. These accounts will allow your money to grow faster than they would in accounts that do tax gains, dividends and income.


Diversify your investments

Investing can be a trade-off between accepting higher risks for higher potential returns or lower returns with a more dependable outcome. But by holding multiple asset classes, including equities (stocks), fixed income (bonds, GICs) and other assets (cash, real estate, precious metals, private equity and debt, cryptocurrency), you can have it both ways. Diversification insulates your portfolio from a variety of risks without sacrificing the kind of returns that will get you where you need to be. Don’t let your nest egg languish in a savings account.


Educate yourself

There are a lot of resources to help you learn more about investing, starting with the Fidelity Canada website. Consider reading financial self-help books or taking a course or workshop in-person or online. The more you learn, the less intimidating investing becomes and the more confident you’ll feel about your finances.


Get professional advice

Working with a financial advisor can ease you through the process of creating a personal financial plan and executing it. Take your time when searching for an advisor and don’t settle until you are confident you’ve found someone who understands you and the goals you want to achieve.

1What challenges do female financial advisors face? (Boughton)