4 Ways We Can Work to Close the Gender Investing Gap

One of the biggest problems in the global economy is that women get paid less than men. This gender pay gap has created an even larger "gender investing gap," where women build less wealth than men. Women have about 32% of the average wealth that men have, and receive about $0.70 for every dollar of retirement income that men get.

But the good news is: the gender investing gap is getting better! Women are taking control of their own investment decisions and building wealth for the future. Here are a few ideas for how business leaders, public policymakers, and all of us, men and women, can work to close the gender investing gap.

1. End the gender pay gap

Here in the U.S., women get paid about $0.83 for every dollar that men earn. The gender pay gap is not always a matter of outright wage discrimination: often it's a result of women doing jobs that the "free market" does not value as highly as men's work.

Women are more highly represented among lower-paying occupations. According to the U.S. Department of Labor, some of the jobs where workers are most likely to be women, such as home health aides and child care workers, pay below-average wages. Research also shows that when more women start to get jobs in formerly "male-dominated" career fields, average wages in those fields tend to go down. This is why gender discrimination is bad for everyone: when women's work is devalued, men's work gets devalued too.

There's no simple answer for how to end the gender pay gap. Forward-thinking companies (and some state governments) are trying to offer better solutions for pay equity, such as pay transparency. When salaries are secret, this can cause women and other historically disadvantaged minority groups to miss out on opportunities for negotiations and pay raises. Pay transparency makes salary information publicly available, so people can make better-informed decisions about asking for pay raises and building careers.

Another sign of hope for the gender pay gap is that America's economy is experiencing low unemployment and widespread talent shortages. If labor -- from men and women -- continues to be in strong demand, it could motivate more companies to offer women better pay and truly equal opportunities for career advancement.

2. Support women as caregivers and in careers

Women are more likely to lose time out of their careers as caregivers for young children or aging loved ones. Leaving the paid workforce for even a few years can cause a long-term gap in retirement savings, as women miss out on years of 401(k) contributions and compounding investment growth.

When women feel as if they cannot have a highly ambitious career and take care of their families, they often drop out of (or get forced out of) the talent pipeline, especially for the highest-paid corporate jobs. For example, only 10.4% of Fortune 500 CEOs are women.

Companies and governments can do more to support women with flexible work options, paid family leave, and other support that helps people manage their caregiving roles while building careers.

3. Help improve women's investor confidence

One of the worst stereotypes in the financial world is the idea that investing is "a men's thing," or something that only men care about or are good at. This is totally untrue! Research from The Motley Fool shows that women are good at investing, and get an average of 0.4%-1.0% higher annual investment returns than men!

If you're a woman who's saving for retirement or investing for any other goal, you deserve to be an investor, and you belong in this world. You don't deserve to be bullied or feel any impostor syndrome; women can be just as good as men (or better) at buying stocks. Too often, the investment media is full of the loudest voices from personal finance gurus who tend to be men. But these guys don't always pick the right stocks or have the right answers.

There are lots of ways to be successful as an investor, and just buying S&P 500 index funds will often help you make more money in the long run than all the overconfident stock-picking "expert" guys on TV.

4. Connect women with better, fairer financial advisors

Too many women don't have a good experience with financial advisors. Research from New York Life found that 48% of women feel "patronized" by financial advisors, and 40% said that financial advisors are less likely to listen to women, or even push women out of conversations.

Financial advisors are supposed to listen to you, help you, and offer unbiased, research-based, fiduciary advice that makes your financial life better. But too often, financial advisors act like the personal finance gurus who annoy me so much: they're arrogant, aggressive, sometimes bullying. This is a terrible way to treat clients, and women tend to get the worst of it.

Financial advisors are predominantly men: for example, 76.2% of Certified Financial Planners® are male. The financial advisory industry has work to do to make sure it's providing fair, unbiased customer experiences for 100% of the population.

Bottom line

More women becoming investors is good news for all of us. If more women can buy stocks and help guide the direction of economic investment and growth, that can help unleash new innovations and bigger opportunities. Women face disadvantages in the job market, but they also have special strengths as investors. Companies and governments should do more to level the playing field at work and in the financial markets.