Women ages 25 to 45 are putting their money into paying off debt and building cash reserves, and investing barely registers among their goals, according to a new report from SoFi, pointing to a sizable opening for financial advisors.
In a ranking of women's financial priorities for the coming year, investing in stocks, ETFs, cryptocurrency or mutual funds was nowhere close to top of mind, placing 11th as only 13% of female respondents selected it. Among men, 28% named the same goal, placing it at the top of their list in the report.
The findings come from an August online survey of 1,200 US adults ages 25 to 45 with a target household income of $75,000 or more.
Paying down debt was the leading priority for women, chosen by 45% of them compared with 28% of men. Rounding down the women's top three were reducing expenses (34%) and building an emergency fund (31%). When asked what they would do with money left over after rent, bills and groceries, just 6% of women said they would invest it, versus 18% of men.
In the SoFi report, which describes women as the “financial first responders” of their households, respondents were asked to rate barriers to investing on a 1-to-5 scale. In that exercise, women gave equal weight to two barriers: keeping cash accessible and not understanding the stock market.
Read more: Active decision-making, not wealth alone, drives women's financial confidence, study finds
“Investing is a necessary step every woman can take to build a strong financial future,” said Liz Thomas, chief market strategist at SoFi. “It doesn’t have to be complicated to be effective, and you don’t need to have it all figured out – nobody really does.”
The widest split between men and women showed up in their retirement outlook. Some 56% of men said they were highly confident they could retire, compared with 26% of women. Another 44% of women reported low confidence, double the 22% rate among men. Men ranked “retirement already covered” among their top three reasons for not investing more, while women placed it second to last.
About 83% of women hold an investment account and 70% use an employer plan such as a 401(k), against 93% and 79% of men. The gap widens in self-directed accounts, where investors choose their own holdings: 40% of women hold one, compared with 63% of men, and women reported lower self-confidence in DIY investing than men.
Not every woman fits that pattern. SoFi calls the 31% of women who rate their stock market knowledge a 4 or 5 “investment-forward.” Compared to the least confident group, these women are more likely to use advisor-managed investments (32% versus 19%). Some 81% of them hold investments outside an employer plan, well ahead of the 54% saying the same among their more cautious peers.
SoFi’s numbers follow earlier survey research from Vanguard, which found that more than 70% of women felt confident in their saving habits, yet 46% kept savings in accounts earning less than 3%. In that survey, twenty-nine percent said guidance from a certified financial professional would encourage them to change course.
“The good news is that identifying this disconnect creates opportunity to decide if you want to change course by taking stock of where you are saving to ensure you’re earning the interest you deserve,” said Sonia Fraher, head of cash management at Vanguard.
Separately, an analysis of more than 50,000 Wells Fargo Advisors accounts from 2018 through 2024 peformed by Wells Fargo Investment Institute found that women took on 13% less volatility than men to achieve similar results. Women are projected to control about $34 trillion of US investable assets by 2030, according to McKinsey & Co.
Lost earning years compound the pressure. Modeling by Wells Fargo showed that a two-year career break – which is more likely among mothers who have to step away from work – led to retirement savings balances that were roughly a third lower for women on average compared to men.
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