Does mother know best or is it down to advertising?

The popularity of Baby Bonds with women is often put down to maternal instinct
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The Independent Online

We are all used to the fact that certain cars, films and drinks appeal far more to women than to men. Some investment products may be sex-specific too.

We are all used to the fact that certain cars, films and drinks appeal far more to women than to men. Some investment products may be sex-specific too.

Tunbridge Wells Equitable Friendly Society's Baby Bond is an example. Three in every four bonds go to female buyers. Much the same picture appears when you look at equivalent products from some of the biggest rival societies. Homeowners sells 70 per cent of its Children's Cash Builder bonds to women. For Family Assurance's Junior Bonds, the figure is 63 per cent.

Friendly society plans like these allow up to £25 to be put away a month for tax-free growth over a term of ten years or more. The plans generally mature when the child reaches his or her 18th birthday. Putting the full £25 a month into a Tunbridge Wells Equitable Baby Bond starting on 1 January 1989, would have produced £5,095 tax-free when it paid out ten years later.

Donna Bradshaw is a director at Fiona Price & Partners, a London firm of independent financial advisers whose client base is 70 per cent female. She believes the bonds appeal particularly to women who want to build modest regular premiums into a useful nest egg. Often, the premiums are funded from weekly child benefit payments, which are generally made direct to the mother, and are worth up to £17.55 per child at 2000/2001 levels. She says: "If it's low premiums and long-term saving you're after, then there is an attraction. At that low premium, you're very limited in what you can put your money into."

Asked why Baby Bonds should appeal more to women than to men, friendly society chiefs can cite nothing more complicated than maternal instinct. Tunbridge Wells Equitable head of marketing David Halliday says: "People want to save for their kids in a long-term fashion We believe that women are at the forefront of that decision." Family Assurance marketing director Barry Chambers adds: "I think doing something for children does appeal more to women than to men."

Of course, once companies decide their products will sell mostly to women, they are bound to target their advertising strategy accordingly. The fact that both Tunbridge Wells Equitable and Family Assurance advertise in parenting magazines may exaggerate an existing bias toward female buyers.

James Dalby of Leeds independent financial advisers Bates Investment Services thinks this strategy may explain why Baby Bonds show a far greater female bias than other children's savings plans. He says: "I've come across a number of cases where we've been asked about children's savings products, and it has been pretty evenly spread between mothers and fathers."

A final strand to the argument suggests that women tend to like Baby Bonds and products like them because the bonds' with-profits structure suits what is generally assumed to be women's more cautious attitude to investment. With-profits policies smooth out returns from one year to the next through a system of annual bonuses.

But Ms Bradshaw gives this idea little credence, arguing that many women able to save the £25 to £50 a month minimum demanded by unit trust and ISA regular savings plans are quite prepared to take that route. "Once women are educated about how risk and reward work, they become more confident with other funds," she says.

One prime candidate for this approach would be Invesco GT's Rupert children's unit trust, which accepts regular savings contributions as small as £35 a month.

Jane Blatchford, the company's head of customer services, has no research figures to establish the gender split of Rupert buyers, but suspects it would roughly duplicate that shown by the Tunbridge Wells Equitable and Homeowners bonds. She says: "If people are buying anything for a small child as a gift which is financially-orientated, then I would have thought the same patterns would apply across all of them. They would seem to hang together."

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