The FSA has recently released a major piece of research that was aimed at gaining a deeper understanding of women as a group of financial product consumers. One of the major aims of the research was to explore whether women's use of financial products and services differed from those of men and how and why this was. In many ways, the gender gap is not so wide as many people previously feared, but the research still threw up some areas for concern.

One of the key areas that the investigation looked into was how women's different life stages, work and family experiences affected their long-term needs for financial products and services, and how this is shifting over time with the changing role of women in society.

The last few decades have seen a number of legislative changes that affect women at some point in their lives. Briefly, these are as follows:

• The 1970 Equal Pay Act gives women the right to the same pay as men for doing the same job.
  
  
• The 1975 Sex Discrimination Act and its 1986 update made it illegal for companies to discriminate by reason of sex or marital status. It also gave women the right to return to a job after having a baby.
  
  
• Pension splitting on divorce was introduced at the end of 2000. This means that pension rights will be taken into account as part of an overall financial settlement upon divorce or annulment. The government estimates that approximately 50,000 women will benefit from this change.

In many respects, the gender gap is almost non existent. The average woman in full-time employment owns 7.0 financial products, a number that is pretty much equivalent to the average male, who owns an average pf 7.2 products. Similarly equal were the proportion of male and female low income earners with no financial products at all. Of those in households earning less than £9,500 per year, 11 percent of men and 10 percent of women lived entirely off cash, owning no financial products at all.

There are clear generational patterns in consumption of financial products and services, and where there are gender differences, they tend to be even greater in the older age groups. One example of this is the fact that overall, around a third of men would be willing to use the internet for day-to-day banking, compared to one in four women. For over the 65's, the figure was only one in 20 women compared to one in twelve men.

There is also a major gender gap in financial product ownership amongst ethnic minorities, which are like to arise out of cultural differences. 31 percent of Bangladeshi women had no financial products compared to only 14 percent of Bangladeshi men. Similar differences were also found in other minority ethnic groups such as Pakistani women and men (19 percent and 11 percent respectively) and black women and men (13 percent and 7 percent).

The breakdown of the family unit has meant that the last thirty years have seen the proportion of adults living in one person households almost quadrupled from 4% to 14% for those under the age of retirement, and more than doubling for those in retirement from 7% to 15%. As a result many more women are having to be financially independent than was the case in the past.

Another factor that has led to a greater need for financial independence has been the increasing phenomenon of single parent families, the number of which has trebled in the last thirty years. The vast majority of these are headed up by lone mothers.

Despite the change in the law that brings the pension fund into the picture as far as divorce proceedings are concerned, the differences in terms of pension ownership are quite alarming, especially given the relative decline in state benefits.

Overall 29% of men compared to only 18% of women have occupational pensions. It is a trend that worsens with age, as more and more men arrange pensions as their career progresses. While 6% of men and 4% of women under 20 have occupational pensions, for those between 35 and 44 the difference has grown to 44% of men and only 28% of women. The figure for personal pensions is 17% for men and only 8% for women.

The outcome is that there are increasing numbers of women approaching or already in retirement with little savings who will need to rely on state provision in old age.

Given the existence of some form of gender gap, women still represent something of a latent market which has the potential to be developed by the major financial institutions. With this in mind, the information that the research gleaned with regards to the marketing of financial services to women will be particularly interesting. The key findings are as follows:

• Women are much more loyal to financial services providers than men, particularly women who are financially independent. This makes the initial customer acquisition extremely significant.
  
  
• Women have a much stronger preference for buying products face-to-face than men. More than half of women stated this as their preferred method of buying a financial product compared with just two-fifths of men. Bad news for the Internet and telephone operators. To make matters worse, all women were less comfortable about using the internet for banking than men, with overall nearly four out of ten men comfortable with this idea compared to only one in four women.
  
  
• More than 60 percent of women bought financial products directly through their bank or building society, with only 20 percent using an independent financial advisor.
  
  
• Women are much less likely than men to read the financial pages of the newspapers. Overall more than one in three men regularly read the financial pages compared to only one in five women. Only 2% see women's magazines as an attractive source of information on personal finance.

Although the gender gap in terms of financial product ownership is closing, there are still some social discrepancies which have a long way to go before the gender gap is closed altogether. Women still only earn an average of 82 percent of men's salaries and occupy only 20 percent of management positions. At a more senior level the gap remains wider still, with just 10 percent of board members being female.

However, women are becoming more economically active, are improving in terms of numeracy and out perform their male counterparts at every level of the education system. Demographic changes mean that in future there will be many more women of working age who are financially independent with earning potential greater than ever before, and who have a need for financial products and services.

There is also evidence that women with school age children are increasingly becoming computer and internet users with the support of their children. When asked which media they would prefer to use for accessing financial information, the internet came second to newspapers, with nearly a third of women between 18 and 24 saying it would be their preferred option.

Given the nature of childbirth, women are always more likely to have their career interrupted by shocks to their earning power. As a result they have a greater need than men of equivalent age and status for financial products to protect them from these shocks to their earning capacity. This is not just to protect themselves from the financial impact of children but also from the risks of divorce, separation and widowhood. Financial planning for women is therefore of paramount importance.

In addition they will continue to live longer in retirement with all the implications that has for their need for retirement income in the longer-term. While there is some evidence that women are aware of these needs, there is not much evidence of them making sufficient provision for such eventualities.

Nor is there much evidence that the financial services sector is specifically targeting this market. To do this effectively financial services institutions must wake up to the fact that they need to target women as individuals in their own right and with their own financial needs.