"Only one in ten Swiss women reportedly manages her own finances.” Nannette Hechler-Fayd'herbe, a renowned banker in Zurich for over twenty years, believes it's time for this to change.
There is much to be gained if women take as much interest in investing as men do. This could help reduce the significant income gap between retired women and men (an average difference of 26% in OECD countries). Additionally, according to a 2022 study by the financial firm BNY Mellon, this shift could inject approximately $3.22 trillion into the global economy. More than half of this amount ($1.87 trillion) would likely go into responsible projects, as female investors are more inclined than their male counterparts to ensure their investments have a positive social and environmental impact.
However, female investment in Switzerland remains low. A study by asset manager Inyova reveals that only 11.5% of women regularly manage their finances, compared to 22.8% of men. Nannette Hechler-Fayd'herbe finds this situation concerning. As the Chief Investment Officer for the Europe, Middle East, and Africa region at Lombard Odier, she shares her strategies for encouraging more women to engage in investing.
You began your career in the banking sector over twenty years ago at Credit Suisse in Zurich. How have you seen the landscape of female investment evolve since then?
Nannette Hechler-Fayd'herbe: Nonexistent just five years ago in Switzerland, female investment has now become a prevalent topic among major corporations and fintech startups. However, women remain an underserved and under-engaged client segment. To change this, it's crucial to meet their specific needs. Women prefer pragmatic, jargon-free information on financial topics of interest to them. For example, they dislike references to publicly traded companies or products using acronyms. Additionally, they value the opportunity to ask questions freely in a safe environment, such as an interactive small-group discussion forum.
The BNY Mellon study suggests that women's investments are more likely to focus on "responsible" projects. Have you noticed this trend as well?
Hechler-Fayd'herbe: It is true that female investors tend to show a more systematic interest in sustainable investments. However, this trend seems to be more pronounced among the younger generation overall, encompassing both men and women.
My research indicates that women generally adopt a more conservative investment style, displaying a lower propensity for risk-taking. This often results in lower equity allocations in their investment strategies, which contributes to slower average wealth growth for women compared to men. This conservative approach is especially common among women of childbearing age and those outside professional fields. Among women working in finance, however, the differences compared to men are minimal, if not nonexistent.
According to the Women's Entrepreneurship Report by HEG Fribourg, published in 2023, female entrepreneurs raise approximately one-third less funding than their male counterparts. Could an increase in the number of female investors help change this dynamic?
Hechler-Fayd'herbe: It's possible. In my opinion, it's a natural process of maturation. Increased female entrepreneurship, with more projects across various sectors, will naturally lead to a broader range of opportunities and, ultimately, to more fundraising and more funds managed by women.
The BNY Mellon study identifies three primary obstacles to female investment: income, risk tolerance, and a lack of confidence in investing. How can we overcome these barriers?
Hechler-Fayd'herbe: Women discuss a wide range of topics, but rarely money. Yet, they could benefit significantly from talking more about their finances and comparing their savings and investment strategies. To change this, we need to highlight these issues more often to them. Ideally, universities and vocational training centers should incorporate investment courses into their core curricula. The University of Zurich has begun this initiative, but it would be advantageous to expand it and build real momentum around these topics. In the United States, for instance, there are investment clubs for students where participants discuss financial investments in a straightforward and pragmatic manner.
What advice would you give to a young woman who wants to start investing?
Hechler-Fayd'herbe: First, it's important to clearly define the amount and frequency of your investments. Using a portion of your annual tax-deductible professional pension contributions for investments is a great way to start. Second, the key is to invest regularly rather than making a large, one-time investment. Avoid frequently moving your capital around. Therefore, third, it is crucial to establish a strategy (defining your goals and time horizon) and stick to it over time to see results.
Finally, there is no "perfect" personality for investing. Different investment styles can suit various levels of risk tolerance, and these can evolve with major life stages.
Biography
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Nannette Hechler-Fayd'herbe holds a degree from the École des Hautes Études en Sciences Sociales in Paris and a PhD from the University of Lausanne. She has over 20 years of experience at Credit Suisse in Zurich, including 10 years in senior leadership roles. In early 2024, she joined Lombard Odier as Chief Investment Officer for EMEA and Head of Investment Strategy, Sustainability and Research.
Last modification 07.08.2024
