Why Women Investors Won’t Embrace Stocks
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Why Women Investors Won’t Embrace Stocks

Female investors have a cautious view of equities. That is a problem—for women as well as the rest of the finance world.

By CAROL RYAN
Mon, Feb 15, 2021 4:05amGrey Clock 3 min

“I think we’re a bit outnumbered, but we’re here.” So said one commenter on a Reddit thread about whether women joined in the recent WallStreetBets trading frenzy.

Female investors largely sat out the riskiest punts taken on stocks like GameStop. That may be no bad thing considering the videogame retailer’s stock is down over 80% from its late-January peak. But low female participation in stock-market investing more generally is a problem, for women and the finance industry alike.

Less than one-quarter of deposits into U.S. brokerage accounts were made by women in January, according to consumer-spending data analytics firm Cardify. Globally, the situation may be even worse: Israel-based brokerage eToro said that female investors make up just 14% of its registered users, most of whom are in the U.S. and Europe.

Some trading platforms did a good job of signing up women during the pandemic. Just over a third of Robinhood users were female at the beginning of this year, up from 20.5% a year before, according to Cardify. For the finance industry as a whole, though, attracting more female custom remains a frustratingly slow work in progress.

Women tend to be more conservative investors than men, preferring to put their wealth into real estate, cash or bonds while steering clear of equities. Credit Suisse surveyed a sample of existing clients and found that almost half of its female customers have 90% of their wealth tied up in low-yielding cash and fixed income—well over double the exposure the Swiss bank recommends.

That kind of caution has downsides, particularly when interest rates are as low as they are today. Since the global financial crisis, cash has returned a paltry 0.6% annually, while 10-year Treasury bills have returned 4.8%, based on Portfolio Visualizer calculations. By comparison, the U.S. stock market has averaged 12% a year.

Governments and companies are increasingly shifting the responsibility for a secure retirement onto individuals, raising the stakes for individuals’ investment decisions. Getting women to increase their exposure to equities is all the more important because they outlive men, so need their pension pots to last longer.

The underlying reasons for women’s caution as investors are complex. They are still paid less than men. Earnings and pension contributions can be disrupted when mothers take time out of the workforce to rear children, hampering their ability to put money aside for the future. Many women prioritize keeping what they have safe instead of investing in better-returning assets that could help offset these pay gaps. The wider issue here is that risk tolerance typically rises with wealth, for both sexes.

The finance industry also has a longstanding image problem with women. For some, investment jargon is the turnoff; for others it is the sometimes patronizing financial products targeted at them.

Warren Buffett once quipped that part of his investing success came from “only competing with half the population.” In reality, few people are benefiting from the status quo. Women are missing out on a share of stock-market spoils. Asset managers are losing out on the higher fees that come from higher-yielding assets. Robinhood needs female customers to maintain its blistering user growth as the startup prepares for a mooted initial public offering.

When they do enter the stock market, women’s investment behaviours often lead to good returns. They tend to think long-term, spread their risk by buying diversified funds and rack up lower fees by trading less frequently than men. That kind of steady capital might help to offset some of the excesses seen in the market this year.

Currently, women’s share of financial assets globally is estimated at 30% by Credit Suisse, or 40% including real assets such as property, which tend to be more evenly distributed. Those numbers should grow as women join the workforce in greater numbers and accept higher-paying jobs. That may automatically improve the situation, as they have more money to invest and can afford to take greater risks with it. Catering to women’s financial needs is likely to become a more competitive business in future.

Yet the finance sector also has a role to play. Robinhood makes much of its mission to “democratise” the industry, and has indeed turned more women’s heads in a matter of months than some traditional brokerages managed in years. With women still heavily outnumbered on even the most accessible apps, though, there is much further to go. Democratising finance needs to include a better pitch to the other 50% of the population.



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How the Middle East Became the Latest ‘Gold Rush’ in Marketing

The Middle East is set to be the fastest-growing marketing region in the world, driven by momentum in countries such as Saudi Arabia

By MEGAN GRAHAM
Tue, Jun 18, 2024 5 min

Saudi Arabia’s fledgling advertising industry and continued growth in the sector in the United Arab Emirates are helping to make the marketing business in the Middle East the fastest-growing in the world.

Ad spending in the Middle East is projected to increase 8.1% to $6.6 billion this year, up from 3.5% last year, according to advertising research firm WARC.

That expansion is building from a much smaller base than in many other ad markets. The Netherlands alone will generate $6 billion in ad spending in 2024, up about 2.3%, WARC said. But it is also enough to outpace every other region in 2024, the firm said.

“It reminds me almost of the gold rush,” said Reda Raad , chief executive of TBWA\Raad Group, an ad agency based in Dubai, in the United Arab Emirates, that is part of the U.S.-based ad holding company Omnicom Group . “I don’t think we’re going to see this type of growth again in our lifetime.” TBWA\Raad has won eight new clients over the past year, with an increase in head count of 17% to accommodate the new work, Raad said.

Some international brands have long maintained a presence in the region. PepsiCo has considered the area a strategic market for decades, said Karim Elfiqi , senior vice president and chief marketing officer at PepsiCo Africa, Middle East and South Asia. Sponsorship deals with local stars such as Mohamed Salah , a soccer player from Egypt, “are a testimony of how over time, we have been part of the cultural fabric of the region,” Elfiqi said.

Other major brands have formed a more recent focus on the Middle East. The Lego Group opened a Middle East and Africa headquarters in Dubai in 2019, citing the size of the region’s young population. That office has developed work such as a Ramadan-themed campaign that ran in the U.A.E. and Saudi Arabia, among other locations.

‘Massive growth’

The Middle East’s ad market has lagged behind regions such as North America and Europe partly because of stricter cultural norms and regulations that affected business, as did a more limited media landscape and economic instability, according to Raad.

But marketing growth in the region is now being driven in part by newfound marketing interest in Saudi Arabia, where ad spending this year is expected to reach $2.1 billion, nearly double its level in 2019, according to WARC. Growth is also coming from the U.A.E., whose ad market is expected to reach $1.7 billion in 2024. Smaller contributors include Qatar and Kuwait.

The landscape has changed now because of economic diversification, increased connectivity and a move into the digital world, leading international brands to enter and invest in campaigns tailored to the region, Raad said.

Four years ago, Saudi Arabia made up a small proportion of business at Lightblue, a creative experience and tech agency based in Dubai. These days, 40% of its business comes from the country, says co-founder David Balfour , who opened an office in Riyadh last month as a result.

“The conversation used to be, ‘We’re going to do this in Dubai.’ Now, it’s ‘We’re going to do this in Dubai—and in Saudi.’” Balfour said. “We’re seeing massive growth in that region.”

There have been speed bumps. As government spending reaches huge levels , Saudi Arabia experienced a rare economic contraction in 2023.

But the country’s efforts to expand its economic pursuits beyond oil have led to the creation of new brands, which are seeking the help of marketing agencies to get the word out.

Marketers in the region are seeking help to stay on-trend in areas such as generative artificial intelligence and social media, said Greg Paull , principal of R3, a consulting firm that helps match advertisers with agencies.

“U.A.E. has been a magnet for the region for 20 years as more investment has come in—but with the new leadership in Saudi since 2017 [when Mohammed bin Salman was named crown prince ], this market has gone through remarkable growth,” Paull said.

Saudi Arabia has faced criticism for its human-rights record under the crown prince, the day-to-day ruler of the kingdom, especially over the 2018 killing of dissident journalist Jamal Khashoggi and the more recent jailing of women’s rights activists.

Mohammed has outlasted the international isolation that followed Khashoggi’s killing, however, and continues to pursue an economic diversification plan dubbed Vision 2030. The country last year unveiled plans for a new international airline called Riyadh Air, is investing billions of dollars to build its tourism and videogame industries, and in March hosted a golf tournament in Jeddah under the auspices of LIV Golf, the Saudi-backed league that has both challenged the PGA Tour and struck a deal to unify with it.

Changing tides

Vision 2030 also calls women’s empowerment a top social priority and seeks to increase the country’s employment rate of women.

Nada Hakeem , CEO and co-founder of Saudi creative agency Wetheloft, said the perceptions of hardships for women in the marketing and advertising industry are outdated and inaccurate.

“As a Saudi woman who founded my company in 2012, I’ve always felt supported by the creative community and the industry as a whole,” Hakeem said. “While every society may have its challenges, I can confidently say that these challenges have not hindered our growth.”

A progression of new laws, policies and incentives are making the industry in Saudi Arabia more inclusive and supportive for women, she added.

In certain parts of the Middle East, “absolutely, it’s still challenging, but they are making the right strides, and they have the right quotas and ambitions in place,” said Rebecca Bezzina , CEO for the EMEA region at R/GA, an agency owned by Interpublic Group of Cos.

“They’ve got wealth, they’ve got world-class ambition, world-class budget. They’re not shy of doing things in the right way,” Bezzina added, speaking of the region overall. “But they still have a talent shortage, especially from a creative and design and product point of view. So often what we’ve found our success has been that they’ve come to us and said, ‘Oh, we want a world-class agency to help us launch this new venture or do this new brand.’”

R/GA said it sees 69% more requests for agency work from marketers in the region today than it did five years ago. It recently handled a brand redesign for Banque Saudi Fransi, which wanted to reaffirm its Saudi roots with a modern identity, and created Weyay, the brand for a new digital bank from the National Bank of Kuwait.

The agency hasn’t notably increased its regional workforce, but it has made changes to facilitate working across Europe and the Middle East.

Other Western players are making moves to capture a piece of the growth. Advertising giant WPP has long worked in Saudi Arabia through units such as Ogilvy and GroupM, but in 2021 established a joint venture with a local company to create ICG Saudi Arabia, a communications and media company based in Saudi Arabia. Ad holding company Stagwell opened new offices for its media agency Assembly in Riyadh in 2021 and in Cairo in 2022.

Regional hospitality

Some executives said certain facets of business dealings in the Middle East are different than in other parts of the world.

Bertrand Morin, a group account director for R/GA who is based in London and works often with Middle Eastern clients, said he spends much more time speaking about personal lives and families with those clients than those in the U.K. or U.S. He has been invited to Middle Eastern clients’ homes to join their families for dinner, something that has never happened with clients elsewhere.

But others say it can feel surprisingly familiar.

Balfour, the Lightblue co-founder, said he was struck by the number of ad-agency workers recently having dinner at the Riyadh location of steakhouse chain Beefbar, and the scene’s similarity to far-off locations.

“The staff are from everywhere in the world. The service and the food is unbelievable. There’s a DJ playing,” Balfour said. “Apart from not having alcohol, you could be anywhere in the world.”

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