Thursday 14 May 2020 12:25 pm CFA Institute Talk

Four fintech forums growing in importance to women investors

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Barbara Stewart, CFA, is a researcher and author on the issue of women and finance. She released the 11th installment of her “Rich Thinking” series of monographs on International Women’s Day, 8 March 2021. Stewart uses her proprietary research skills to work as an Executive Interviewer on a project basis for global financial institutions.

Based on my 10 years of research, I know that financial independence – being able to pay one’s way without having to work or rely on others – is a critical theme for women.

In my recent global survey, when women were asked the most important reason why they invest, the second most popular answer was ‘to become more financially independent’ behind the unsurprising first choice, ‘fund my retirement’.

Historically, women have been less likely to invest than men. But that is changing fast. Women are increasingly taking advantage of four fintech forums that are helping them get started.

1. Copy Trading: ‘Future Feminist’

Copy trading is investing in the wake of another investor, mimicking their trades in real time. There are several copy trading platforms, such as Israel-based e-Toro. Most influential traders on these platforms integrate social media to communicate and explain their strategies. Traders normally earn a revenue share from the trading commissions generated by their followers on the platform.

Sandra Bourbon started investing in her own ‘Future Feminist’ gender-equality stock portfolio five years ago. Today, about 20,000 investors follow and buy the same portfolio of shares as Bourbon using Shareville, Nordnet’s social investment network.

Bourbon engages with her followers largely through Instagram. When I interviewed her recently in Sweden, she said that most of their questions these days revolve around the COVID-19 epidemic’s impact on the stock market. Her advice? “I will keep investing in gender-equal companies that I believe in. I have only invested in eight stocks. The best performer under the present circumstances is ICA Gruppen – they own all of the major supermarkets in Sweden.”

2. Social Communities: ‘Moneypenny’

Social communities are networks that promote communication about all aspects of investing, including portfolio tracking and performance comparison and competition. These investment communities live on social media, primarily Facebook and Instagram, and are especially popular in Scandinavia.

Linnéa Schmidt, a cancer researcher, founded the popular Facebook community Moneypenny. She and her partners now administer several Facebook communities in the Nordics. Combined, these communities number more than 200,000 members.

Starting Moneypenny has changed Schmidt’s aspirations for her professional life. “My hope is to eventually make this work my full-time job,” she told me. “Cancer research is important, but so is getting women to start investing, and (unlike medical research) I can see the results of my efforts and have an impact immediately.”

3. Mobile Investment Clubs: ‘Voleo’

Mobile investment clubs invite friends, family and colleagues to join an app, link accounts and begin investing together. Once established, these clubs can compete with one another.

I am yet to encounter any formal online investment clubs other than Vancouver-based Voleo. Voleo, whose app is currently available in the US only, is the empress of mobile investment clubs: almost one in two of their investors are female.

Women can solo trade on Voleo, team up with a club or start their own. Inside the clubs, members debate investment ideas and then vote on buying. The clubs track their performance and can compete with other investment clubs across the globe. Votes are tracked for each trade that clubs do not approve, so the app has an ‘I told you so’ feature.

Randiesa Spires is the president of Florida Stock Sisters, a Voleo investment club composed of eight African-Americans who meet regularly online. Spires told me: “Each week one of us analyses two companies and then presents our recommendation. Being accountable to the group helps so much – we have to be fully prepared for our meetings.”

4. Subscription-Based e-Learning: ‘Female Invest’

Subscription-based online learning, or e-learning, is already a trend in universities and is gaining more momentum as a result of COVID-19.

Female Invest is Scandinavia’s largest online investment education platform for women. Topics include an introduction to investing, what COVID-19 means for markets and how to invest in bear markets. 

I spoke to co-founder Anna-Sophie Hartvigsen, who was recently listed as among Forbes‘s 30 under 30. “After launch [in 2017] a lot of media covered our story and within the first one or two months some of the big banks reached out to collaborate. Our educational events are in partnership with the banks – there is no product promotion: we are independent.

“For the last year we have gone all-in as full-time entrepreneurs and now we are a for-profit company. During that time, we have launched a digital learning platform, created a subscription business, reached thousands of women across borders and attracted 25,000 attendees to our events.

“The demand for this type of investor education is global. In November of 2020 we launched our subscription model offering access to video courses and investment tips for a monthly fee of DKK 59 [about £6.90].”

In these times of self-isolation and social distancing, online activities are fundamental to our day-to-day productivity. Advisers need to encourage people to embrace online investing platforms, clubs and communities.

Recent market declines may have created an entry opportunity, just like that of the 2008-2009 financial crisis.

Financial knowledge builds confidence and the freedom to pursue the careers and lives that we want. In Hartvigsen’s words: “We work to unite all the women who want to be the boss of their own money and begin their investing journeys.”

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By Barbara Stewart, CFA

All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.

Image credit: Getty Images / Maskot