Rising female influence in wealth management

In recent years, the landscape of wealth management has undergone a significant transformation, with women becoming a predominant force in controlling and transferring assets.

Speaking at this week’s Morningstar Investment Conference, Gillian Hepburn, Commercial Director of Benchmark, underscored the importance of this trend. Hepburn highlighted that women are set to control an astonishing $30 trillion in assets by 2030. This influence represents a critical demographic that asset management firms and financial advisers must prioritise.

The initial wealth transfer: From men to women

According to Hepburn, the initial and often overlooked transfer of wealth typically occurs from men to women within opposite-gender couples. This pivotal shift sees women not just as beneficiaries but as primary wealth controllers. The traditional focus on the next generation must expand to include these immediate transfers.

As Hepburn noted, “Two-thirds of baby boomer wealth is held in joint households, and the first transfer is typically from a husband to a wife.” This makes women crucial stakeholders in the wealth management process much earlier than many might anticipate.

“There are predictions that by next year 60 per cent of wealth will be in female hands. Women are inheriting the wealth right now.”

Current engagement levels are insufficient

Despite the significant role women are poised to play in wealth management, current engagement levels by professionals in the field are startlingly low. Benchmark research revealed that only 5% of advisers have a targeted proposition for retaining and attracting women’s wealth. Furthermore, a mere 34% of women report they would stay with their family adviser post-wealth transfer. These figures highlight a glaring gap in the industry’s approach to female clients.

How to better engage women

  • Inclusive client discussions

To bridge this gap, financial advisers need to involve both partners in financial discussions actively. Benchmark found that only 22% of advisers always include both partners, with many defaulting to the male partner as the primary contact. Rectifying this can prevent alienation and build a foundation of trust and inclusion.

  • Avoiding stereotypes

Advisers must avoid stereotypes about how women and widows might manage their finances. Early planning and engagement can help ensure that women do not feel pigeonholed into traditional roles or expectations.

  • Visibility and representation

Hepburn also pointed out a simple yet impactful observation: out of the adviser websites surveyed, only one featured an image of a woman. Visibility in marketing materials and online platforms can send a powerful message that a firm truly understands and values its female clients.

  • Education and communication

Educational resources tailored to the specific needs and concerns of women can also play a significant role. Providing information on financial planning, wealth management, and investment strategies in a way that resonates with women will enhance engagement.

By embracing inclusivity, enhancing visibility, and actively involving women in the wealth management process, firms can better serve this rapidly growing segment and ensure their future relevance and success.

For more insights into how women are shaping the future of asset management, visit our previous article.

Asset management firms and financial advisers are at a pivotal juncture where adapting to these changes is not just beneficial but essential. Engaging with women effectively will ensure that the wealth management industry evolves in a manner that is both inclusive and progressive.

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