Investments Keep Falling (In the Gap)
On the 29th of April 2019, Tito Mboweni announced the abolishment of the ‘Tampon tax’, however, the upcharges (‘pink tax’) on female products have not yet left the chat. Females are still spending way more than males on lifestyle products that are often fundamentally the same as the “male versions”. Think razors, deodorants, shampoo and clothes. In fact, there is a term for this in pricing theory called “gender-based versioning”. This means that products that are fundamentally the same are priced differently, based on the perceived willingness to pay by a certain gender (absurdity, I know!)
South Africa also presents its unique challenges for females. 37,9% of households are solely financially headed by females and females remain largely responsible for many unpaid duties (cooking, cleaning, and raising children). All this time they could otherwise use more productively to generate income to invest or save more.
So, how does this vast inequality come into play in investing?
Well, females have less disposable income (paid less and higher costs) to invest and are less likely to be educated about financial matters compared to males. According to the latest report published by the CFP Board, only 23% of financial advisors are women and not much has been done to improve this figure, albeit the fact that female advisors perform better than male advisors (BCG report).
For this reason, females continue to be underserved by the investment industry. A report published by Merrill Lynch showed that 35% of women are likely to switch financial advisors vs only 30% of men, and we can understand why. Firstly, women are assumed to be risk averse (wrong), education is largely inaccessible and the system is not positioned to empower females.
Does this mean females are bad investors?
An article published by Forbes showed that females are better investors. Females start early, and focus on their goals, albeit their amounts are generally smaller. Females also show more risk awareness in investing, which results in the outperformance of their male peers. Women are more diligent and agile than men - which pays off in the long term - so the problem does not seem to be with female investors, but rather the system that is meant to support them.
WHAT IS FRANC DOING?
Non-biased risk assessment process
Franc has a FREE robo-advisor that helps you determine your risk tolerance. The robo-advisor does not gender investors, thus, eliminating biases and discrimination inherent in the financial system. The robo-advisor facilitates the process of being aware of risk faster, without the hassle.
Seamless goal-setting process
I’ve already alluded to this, but research shows females are more goal-oriented in investing than males are. Franc has a seamless goal-setting process that will set you up for success. You can put an image, name, amount, and date to your goal (trust me, it’s like a whole vision board). You can also lock your goal to prevent the temptation of dipping into your savings unnecessarily.
Strong emphasis on education
Education is at the heart of who Franc is, and every employee gets involved in this - from an intern to the CEO. This is incredibly important to us as an organisation - to empower those who decide to invest with Franc. In fact, we’ve decided to add educational content to the app (update your app to check it out) to make the content even more accessible.
Good understanding of individual-specific situations.
Unlike other investment platforms, Franc does not have a minimum amount to be invested. If you want to go on a career break, there is no expectation to keep contributing and no penalties if you do not. Our platform has no minimums and no recommended amounts to be saved each month (unless you need to hit your goal within a certain time). Every user is different, and we keep that in mind.