A new study by Financial Finesse shows thatwomen are still significantly behind men in their knowledge andconfidence in many areas of finance, although the gap has narrowedsince 2010.

Liz Davidson, CEO and founder of Financial Finesse, said in apress release these findings are disconcerting since womengenerally face more obstacles than men in meeting long-term goalsand income needs in retirement.

“Women... earn less on average than men, but have significantlylonger retirements due to the fact that women live an average offive years longer than men. They also face higher health care coststhroughout their lives. To overcome these obstacles, they should besaving more than men, and investing their savings more aggressivelyto get a strong long-term return that will sufficiently grow theirportfolios. Instead, we see the opposite happening and this couldput women in a dangerous position of not being able to meet theirfinancial needs later in life.”

Key findings from the study include:

• The gender gap was most notable in investing and budgeting.Twenty-five percent of women reported feeling confident with howtheir investments were allocated compared to 42 percent of men, andonly 63 percent of women said they had a handle on their cash flowversus 80 percent of men.
• The smallest gap was in retirement preparedness but both womenand men are woefully unprepared. Only 12 percent of women and 19percent of men are confident they will be able to replace 80percent of their income in retirement.
• Women and men are participating equally in their employers’401(k) or retirement savings plans with 92 percent of women and 91percent of men saving, yet women may be investing tooconservatively to meet their income needs in retirement.

The good news, according to Davidson, is that there are signsthat women are starting to educate themselves. In Q1 2011, thegender gap began to narrow across all demographic groups with womenunder 30 showing the most improvement.

Davidson also notes that women are twice as likely to useworkplace financial education services as men, and that they aremore likely to make changes as a result of the education theyreceive. In addition, there are numerous studies showing that whenthey are educated about finances, women actually tend to outperformmen in their investing because they tend to trade less, incurringlower fees and taxes.

“This problem can be solved,” Davidson said. “But, like anysocietal problem, it won’t happen overnight, and it will requiremore resources to be made available to women in more schools, morecommunity organizations, and at more companies. It will alsorequire women themselves to change how they think about money.We’ve seen firsthand the impact of financial education on women andhow well suited women are at taking an active financial role intheir households. All the pieces of the puzzle are there. Now it’sjust a matter of putting them together.”