The Empowering of Women in Financial Planning

An interview with Elinor Davison Author of “The woman’s simple Guide to Investing.”

I met Elinor Davidson who is looking to empower the women she advises and assist them on their journey to financial independence in a café in central London.

Elinor, tell be about your journey and what led you to write the book “the woman’s simple Guide to Investing.”

The reason I wrote the book is because it is my calling, I want to help women empower themselves and take control of their lives, to be independent and to access resources to support themselves and their children. I understand that due to inequality there are invisible barriers for women to make progress with their plans and build a strategy that will create income and help them on their journey to live a life of dignity. It is very important that women can access a body of knowledge that will help them on their journey.

Elinor, does it make sense to Focus on Women?

Yes it really does, a great wealth transfer is coming, passed down from the baby boomer generation, and women will emerge as the biggest beneficiaries. Approximately $30 trillion in wealth is set to change hands in the next decade and women are poised to inherit a sizable share, according to research by McKinsey that was published in 2020. In addition women Are Building Wealth Too, they are not only poised to inherit a large share of wealth, they are also creating it on their own.

Despite the persistent gender pay gap (according to McKinsey women still only earn approximately 80% of what their male counterparts do), many are intentionally accumulating their own wealth by climbing the career ladder. In 2019, McKinsey research found that there was a significant increase in women taking on upper management roles globally in recent years. One finding: 44% of companies had three or more women executives, up from just 29% in 2015.

It is my opinion that “It’s critical that women seek professional guidance regarding wealth management. “Women are attaining financial roles and responsibilities that are taking them beyond simply controlling the household budget.” Therefore, it makes sense to on women and their needs and create for them specific methodologies and solutions.

Elinor, how do you feel becoming an advisor in the financial world?

I am very energized as this is my calling, currently, most financial advisors are male, with women accounting for only 15%, according to McKinsey. This influences the dynamic between advisor and client, especially when their values diverge. McKinsey research reveals that there are several key areas in which men and women differ when it comes to their financial planning goals. Women tend to be more focused on life goals than men, but only a quarter are comfortable making financial-related decisions on their own—15% fewer than men. I want to change this statistic.

What do you suggest?

Access to knowledge is the key, I want to help women empower themselves by having access to knowledge and good trustworthy solutions. Not only to have access to understanding markets but to understand the importance of research and due diligence before investing. I believe women should focus on investing in socially responsible funds and funds that encourage the empowerment of women.

Are there any funds that do this already today?

Yes, Socially responsible investment (SRI) funds can take on a variety of mandates. They often look to invest in companies that do business in an environmentally responsible manner and that pay attention to fair supply chain practices. Still, others make a point not to invest in companies that are involved in the sale of tobacco, weapons, or gambling. Less known is that many of these SRI funds have also made it their business to invest in companies that strive to empower women and other underserved cohorts in the workplace. Here are a few that do just that:

Domini Social Investments

Domini Social Investments, LLC. looks to invest in companies that are committed to workplace diversity. That means they expect to see a substantial representation of women and minorities in management-level positions, including as senior line executives, when evaluating a company.

Its funds also look to invest in companies that provide an open work environment for minorities, LGBTQ+ (lesbian, gay, bisexual, transgender, and queer, employees). Additionally, it seeks out companies that offer sexual harassment training and programs that promote respect for diversity.

In that vein, Domini stays away from companies that have a history or record of controversies related to lack of diversity, sexual harassment, or discrimination. Domini’s Proxy Voting Guidelines note that it will vote against boards of trustees that do not include women or people of color.

Calvert Investments

Calvert Investments has long been an advocate for diversity and the promotion of women worldwide. In 2004, in partnership with the United National Development Fund for Women (UNIFEM), it created Calvert’s Women’s Principles (CWP), which defined a global code of corporate conduct on empowering and investing in women.

In 2010, those principals were used as the basis for the UN’s Women’s Empowerment Principles. The fund was also instrumental in developing a model charter language on board diversity, recommending companies abide by it when creating an independent and inclusive board.

Calvert made much headway on this front in 2010, when it filed 14 resolutions on women and diversity in the workplace. As a result, many companies have since changed their board of director’s selection criteria to include race and gender diversity. Additionally, Calvert has been advocating for women’s empowerment by actively voting its proxies, initiating shareholder resolutions and holding discussions with corporate management.

Elinor, are you trying to initiate a fund that will focus on being environmentally and socially responsible while also focusing on empowering women?  

Yes, it is my dream to create a wide variety of income creating solutions for women. I want to invest in socially responsible assets such as long term care with a focus on brain and spinal damage, litigation in the publics best interest, supported housing in the UK and Ireland (for people with disabilities and single mothers) and also invest into funds such as these.

The Fidelity Women’s Leadership Fund: FWOMX

FWOMX – Fidelity ® Women’s Leadership Fund | Fidelity Investments’

Strategy

Normally investing at least 80% of assets in equity securities of companies that prioritize and advance women’s leadership and development. Such companies include those that, at the time of initial purchase, include a woman as a member of the senior management team, are governed by a board for which women represent at least one third of all directors, or in the Adviser’s opinion, have adopted policies designed to attract, retain and promote women. Investing in securities of domestic and foreign issuers. Employing sustainable investing exclusion criteria to avoid investments in issuers that are directly engaged in, and/or derive significant revenue from, certain industries. At present, these include civilian semi-automatic firearms; tobacco production, or bonds issued against the proceeds of tobacco settlements; for-profit prisons; controversial weapons (e.g., cluster munitions, land mines, biological/chemical weapons, blinding lasers, and incendiary weapons); and coal production and/or mining.

Pax Ellevate Global Women’s Leadership Fund PXWEX

PXWEX – Impax Ellevate Global Women’s Ldr Inv Fund Stock Price | Morningstar

Strategy

The fund invests more than 80% of its total assets in the component securities of the Women’s index and in American Depositary Receipts, Global Depositary Receipts and Euro Depositary Receipts representing the component securities of the Women’s index.

Elinor, your calling is noble, and you are changing the reality for the families you work with, Thank you, in order to succeed in a changing global environment, we all must be prepared to learn and implement without fear, we need to create a holistic experience for our female clients.

It is my calling to design a customized, comprehensive financial strategy for women to achieve their life goals, recommending appropriate financial solutions, and being able to pivot the plan to adapt to women’s changing lifestyles and needs over time.