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Please read the article from my upload (pdf, “Are men better investor than women?”) and write two pages article summarization for this one. Then, read another similar article, which I linked below, write another one page compare and contrast.… Total will be three pages and apa style. Please analysis detail and compare both articles. Thanks for your help.

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Are men better investors than
women? Gender differences
in mutual fund and pension
Received (in revised form): 20th December, 2007
Rita Martenson
is Professor of Marketing at Gothenburg University, School of Business, Economics and Commercial Law. She has published numerous
articles, books, and conference papers in marketing communications, branding, cross-cultural issues, as well as retailing and financial
Abstract The majority of consumers lack awareness of how their financial situation will be
when they retire. Women face a particularly severe situation. One reason is that reformed
retirement systems are disadvantageous for women. Another reason is that women are much
less interested to manage their money and to make long-term investments. This paper
reviews prior studies on gender differences for financial consumers. Results are inconclusive
and more research is needed to clarify when and why there are gender differences. This
paper also analyses how the Swedish population has allocated their pension investments
within the state pension system as well as the results from a nationally representative sample
of consumers. There are less significant differences between expert men and women. Most
differences are between novice men and women. Men are both more profit-oriented and more
motivated to make financial investments than women are.
Journal of Financial Services Marketing (2008) 13, 72–81. doi:10.1057/fsm.2008.7
Keywords gender differences, retail banking, pensions, mutual funds
Financial experts, researchers, and government
officials from several countries have
concluded that the majority of consumers
lack awareness of how their financial situation
will be when they retire. People live in
retirement for 20–30 years if they retire at
the age of 65, which is a considerable part of
their lives.1 Most American boomers (60 per
cent of the population born 1946–1964),
however, will for example not be able to
Correspondence: School of Business, Economics and Law,
Gothenburg University, Box 610, Göteborg SE40530, Sweden.
Tel: + 46 31 786 1471;
Fax: +46 31 786 4499;
Journal of Financial Services Marketing
maintain a lifestyle close to their current one
without continuing to work, and only about
a quarter of them are financially prepared for
their twilight years.2 Nearly half of the
unprepared boomers are not aware of the
difficult financial straits approaching and they
have attitudes similar to those of the affluent
Against this background it is problematic
that several studies conclude that the situation
is worse for women than for men. The
pension prospects of the majority of women
are poor, and many women face the pension
poverty trap.3 One of the reasons is that
women need to stretch their retirement
income over a longer time since they live
longer on average than men, and they must
meet higher expenditures because chronic
Vol. 13, 1 72–81 © 2008 Palgrave Macmillan Ltd 1363-0539 $30.00
Are men better investors than women?
health problems increase with age.4,5 Another
reason is that most OECD countries have
reduced state pensions and are instead
promoting private (occupational and
personal) pension savings, a reform that
ignores the particular difficulties women have
to acquire an adequate pension income.
A common denominator for the European
pension systems is that women’s pensions are
much more affected by the reform than
men’s pensions, because fewer women than
men have occupational pensions and the
amount of their entitlements is lower. Even
for the pension systems such as the Danish
and the Dutch, which may be the best in
Europe, the norm does not meet female
pension requirements.6 The old pension
systems were developed on the basis of the
family as a unit. But as long as labour
markets, wages, pension schemes, and care are
gender differentiated, the concept of
individualisation based on the principle of
equality does not fulfil its promises.6
Ginn3 argued that the situation is
particularly acute in Great Britain. British
women have a high rate of divorce and
cohabitation, and they can therefore not rely
on a husband’s pension. In addition, Britain
has a relatively small first tier state pension,
which will sink to about 7 per cent of
average earnings by 2050. Furthermore, the
ratio of older women’s personal income to
older men’s has declined from 71 per cent in
the mid-1980s to 53 per cent in 1998.
British women often have a part-time job
that does not bring any financial gain
because of the withdrawal of means-tested
The situation is problematic also for
American women.5 About half of them work
in low-paying jobs without pensions, and
those who do have pensions receive only
about half the amount that men do. Gender
differences in income among the elderly in
the US persist at levels comparable with
those of 50 years ago.7 It is projected that
married women who retire over the next 20
years will have pension benefits that average
© 2008 Palgrave Macmillan Ltd 1363-0539 $30.00 Vol. 13, 1 72–81
35–40 per cent of men’s.7 The comparable
figure for married women who retired in the
1970s and 1980s was about 15 per cent of
men’s pension benefits. Improvements in
single women’s benefits relative to men’s will
have a lower rate of change. Women all over
the world are consequently in a very
vulnerable position at retirement. If these
differences persist, women may end up
accumulating less wealth for retirement
regardless of how they invest their defined
contribution (DC) assets.8
The purpose of this paper is therefore to
review prior studies that focus particularly on
gender differences. Of particular interest is
the question whether differences are genderbased or not, and in what ways they may be
different. The results of a large study on
financial issues are presented and analysed
based on what was found in prior research.
Finally, these results are discussed and ideas
for future studies are suggested.
There is a general lack of research on
consumers’ financial investment behaviour,
but the few studies available usually show
that there are gender differences.9,10 A
widespread view concerning financial
decision-making is, for example, that women
are more risk averse than men.11 A review of
prior studies must therefore include the risk
aspect. Other gender differences reported are
regarding motivation, confidence and
knowledge of financial issues, and the use of
financial advice.
Confidence and knowledge
A quote from Confucius says that: ‘To know
that we know what we know and that we do
not know what we do not know, that is true
knowledge’. Russo and Shoemaker12 argued
that such metaknowledge, that is, an
appreciation of what we do know and what
we do not know, may be more important
than primary knowledge. It is consequently a
mistake to equate experience and learning.
Journal of Financial Services Marketing
While experience is inevitable, learning is
not. Overconfidence persists in spite of
experience because people often fail to learn
from experience. In order to learn, they need
feedback about the accuracy of their opinions
and doubts, and the motivation to translate
this information into better metaknowledge.
Nevertheless, prior research indicates that
women have less confidence in their
investment decisions.13,9 When American
women assessed their own knowledge of
financial products and services, they gave
themselves a grade of C or lower.14 Only 18
per cent felt very well prepared to make wise
financial decisions, and they were even less
certain about their ability to protect their
investments and retirement savings. While 67
per cent considered it important, only 15 per
cent felt that they could accomplish it. Some
studies have tried to explain why these
differences exist. Estes and Hosseini9 made a
statistical control of other variables such as
the nature of the task, personal characteristics,
knowledge of the domain, and information
processing capabilities. These additional
analyses did not change their conclusion that
men are substantially more confident in their
investment decisions than women. In general
women tend to be less confident in domains
considered to be masculine, in spite of equal
ability to perform.8
Motivation to invest
Studies reviewed by Burton15 in 1995
showed that many women consider the
purchase of financial services as a masculine
activity. Men classified the service as
masculine or feminine based on the gender
of the service provider, while women based
their classification on the gender of the
typical user. Men’s identities, self-esteem, and
sense of power were all inextricably linked
with money, while women sought immediate
gratification through spending and were
more security-oriented in money handling.
Women were also more interested in their
current debt than with their long-term
Journal of Financial Services Marketing
Vol. 13, 1 72–81
financial goals.14 The primary financial goal
for the year was to pay off debts.14 They
were much less interested in savings,
investments, and to prepare for retirement.
Studies have also shown that when women
do not have a typical female outlook on
financial services, they often encounter
discrimination. It is for example more
difficult for female entrepreneurs to borrow
Risk attitude and risk propensity
Women tend to be more risk averse than
men in a number of different areas according
to a large number of studies (see Byrnes et
al.,16 for a review). This is explained by
biological differences and by the way women
and men are socialised (see eg Olsen and
Cox8 for references). Women have higher
levels of enzyme monoamine oxidase, which
reduces sensation seeking. Gender-related
risk-taking differences in childhood games
develop only after an age when peer pressure
and social expectancies become strong. Risktaking differences are also somewhat context
specific and experience and level of expertise
reduce, but do not eliminate risk-taking
differences by gender.
Risk taking involves options that might
result in negative outcomes.8 Several studies
have shown that experts tend to perceive of
risk in more concise and abstract terms,
while nonexperts are more intuitive.8 While
the experts may use statistics to classify the
risk level, nonexperts tend to characterise risk
more broadly such as by feelings of dread,
unknowing, and degree of trust. From a
behavioural point of view, risk aversion may
be seen as loss aversion. Uncertainty of
outcome can serve as an amplifying factor in
potential loss situations. Uncertainty is
therefore similar to the basic emotion known
as surprise, which by itself has no inherent
hedonistic tone but can amplify.8
Some studies have found that women are
more risk averse than men.4,10,17 The impact
of gender on risk taking, however, was
© 2008 Palgrave Macmillan Ltd 1363-0539 $30.00
Are men better investors than women?
significantly weakened when investor
knowledge of financial markets and
investments was controlled.10 All men are not
equal. Optimistic men were active in the
futures and options market, while pessimistic
men were more active on the stock market.17
A study of professional investors showed that
women placed more emphasis on the
downside measures of risk and ambiguity
than did men, and they gave lesser weight to
variability of the return.8 Women professional
investors were found to be more security
prone decision makers, and exhibited a
greater tendency to select a return target and
then work to reduce risk. Men, on the other
hand, focused more on increasing return.
The prevalence of stereotypic genderspecific risk attitudes has been questioned by
some researchers. Female subjects do not
generally make less risky financial choices
than male subjects; the comparative risk
propensity of male and female subjects in
financial choices strongly depends on the
decision frame.11 When identical decisions are
presented as investment choices, no gender
differences in risk attitudes were found.11 In
a study of professional female and male
investors there was no evidence of risk-taking
It was not gender alone that determined
investment choice in another study, but rather
a combination of gender and marital status.19
Single women and married men were less
likely than single men to choose ‘mostly
stocks’, and neither education nor age
affected allocation decisions. Other studies
also found differences based on marital
It is interesting to note that when a
representative sample of the population is
studied, women do not appear to be risk
averse. Sweden launched a new public
pension system in 1999 where 2.5 per cent
of the earnings that go to the DC system can
be invested in up to five mutual funds (from
a total selection of around 600 mutual funds)
chosen by the individual. The Premium
Pension Authority (PPM), which was started
© 2008 Palgrave Macmillan Ltd 1363-0539 $30.00 Vol. 13, 1 72–81
to run the new pension system, ran a massive
information campaign to introduce the new
system. A study based on a sample of 147,216
individuals showed that more women (68 per
cent) than men (66 per cent) made an active
investment decision, and the portfolio of the
average active Swedish female investor is
associated with a higher risk compared with
the default alternative.21 The choice of PPM
funds differs from other types of mutual fund
investments. Consumers select PPM funds in
their homes, and mail their selection to the
PPM authority. This may therefore not be
perceived as a masculine activity. Another
difference is that the PPM money is much
more abstract than money invested in private
pension funds. The latter may be used for
other purposes (eg consumption), but PPM
money can only be used for PPM
Financial advice
In many countries, financial due diligence
regulations and ethical guidelines require
either implicitly (eg the US and Canada) or
explicitly (eg Australia, Ireland) that financial
advisors know their clients and that
investment recommendations are suitable
given clients’ financial and personal
circumstances.22 A major problem with
clinical judgments is that they are subject to
a variety of cognitive biases, including gender
stereotyping.22 Gender stereotyping may be
regarded as a heuristic that not only serves as
an energy-saving device, but may also lead to
erroneous conclusions. If financial advisors
stereotype their clients they may
overgeneralise conclusions about their female
versus male customers. They may, in that case,
think that almost all women are risk averse
(eg 95 per cent), while in reality only most
(eg 60 per cent) of them are risk averse.
Prior studies reviewed by Roszkowski and
Grable22 showed that males were viewed as
more risk tolerant than they really were and
females were viewed as more risk averse than
they really were. In addition, stereotyping
Journal of Financial Services Marketing
about one’s own group (in-group) may differ
from stereotyping about other groups (outgroups), but results from prior studies are not
consistent. Roszkowski and Grable found it
rather disappointing that the 183 professional
advisors they studied, who had actual
experience with their 290 clients, were not
more accurate in gauging their clients’ risk
tolerance than undergraduates who were only
given visual clues and maybe some casual
knowledge of their targets as the basis for
their estimates. Advisors made systematic
errors when they judged the risk tolerance of
their clients, and seemed to have a somewhat
distorted sense of the risk tolerance of males
and the risk aversion of females with the
latter being greater. Advisors seemed to see
greater risk tolerance differences between
males and females at the low end of the risk
tolerance continuum than at the high end.
European women’s need for financial
advice to avoid the pension poverty trap is
greater than men’s, but they lack resources to
pay for advice.3 American female clients
depended more on advisors’ advice than did
male clients.8 Female clients were more
concerned how their investments fit into the
bigger picture of their economies and social
lives. Most (82 per cent) female advisors were
willing to look at portfolio investments from
this larger perspective, whereas only 63 per
cent of male advisors were willing to do it.
Conclusions about gender differences
in prior studies
The review of prior studies on gender
differences in financial matters provides quite
an inconsistent picture. On the one hand,
several studies report gender differences, but
it is unclear whether such differences would
exist if a representative sample of the
population had been used. On the other
hand, several researchers report that
differences are significantly weakened when
for example investor knowledge of financial
markets and investments are controlled.
Several studies control for variables that are
Journal of Financial Services Marketing
Vol. 13, 1 72–81

not theory-based. An example is that level of
education is controlled for without any
theory-based explanation why the level of
education would be important for motivation
for financial issues. What seems to be clear is
that men are more confident and more
motivated to invest than women. Despite the
widespread view that women are more risk
averse than men, the studies reviewed do not
support that opinion. Prior studies reveal
however that both male and female clients
may get bad financial advice because of the
prevailing gender stereotypes.
The data analysed in this study come from
the Swedish PPM23 and from a survey sent
to a nationally representative sample of
The pension data are based on actual
choices made by 5,470,000 Swedes (2005)
and a market value of more than S20bn
(2005). The Swedish population can decide
how they want to invest their premium
pension money. The categories they can
choose from are (a) share funds (mutual
funds), (b) mixed funds, (c) generation funds,
(d) interest-bearing securities, and finally
(e) they may decide not to make an active
choice themselves but to let the 7th
AP-Fund manage their money. The 7th
AP-Fund invests in global stocks. When risk
is measured by variability, the share funds
(mutual funds) generally have a high risk, the
interest-bearing securities have a low risk,
and the other funds are average in risk. Data
from actual choices by the Swedish
population 2002, 2003, 2004, and 2005 were
used in this study.
The mutual fund investment data are based
on a survey to a nationally representative
sample of 5,000 people (25 + years) and
913 usable questionnaires were received
(a response rate of 18.3 per cent). The
database used is owned by the Swedish
Government and includes all people living in
the country. The database does not include
© 2008 Palgrave Macmillan Ltd 1363-0539 $30.00
Are men better investors than women?
information about ownership of mutual
funds, stocks, etc. Consequently, the survey
had to be sent also to people who did not
own mutual funds and stocks. When PPM
funds are excluded, around half of the
Swedish population owns private mutual
funds and stocks.
Interaction among variables
Prior studies10, 21 have shown that financial
knowledge and familiarity with financial
products are important. A comprehensive
body of research in marketing has
acknowledged that motivation and ability to
process domain-specific information influence
how consumers process information for
decision-making purposes. This type of
research has used a dual-process approach,
such as the elaboration likelihood model
proposed by Petty and Cacioppo24–26 in
1984. The dual-process models are concerned
with whether consumers use a thorough and
effortful process-to-process information for
their decisions and the consequences of such

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