Advisors that even casually follow demographic data and trends should not need further convincing about women’s rising economic might. It’s well-documented and a frequent point of discussion in wealth management circles.
As it should be. Baby boomer and Gen X women are benefiting in significant fashion from the Great Wealth Transfer and plenty are driving growth in the population of high-net-worth clients. The same is true of millennial women.
Women, particularly those in their 40s and 50s, are highly focused on retirement planning, leaving legacies and doing right with their financial assets, confirming advisors need to have educational tools and strategies ready to best serve these clients. Better yet for advisors are two points: More women are entering the high-net-worth category and across all income spectrums, women that aren’t yet working with wealth managers are open to doing so.
Encouraging Trends
A new survey from RBC Wealth Management confirms a new era is upon the wealth management community – one in which women are controlling more wealth than ever before, but that’s not the end of the store.
Advisors looking to best connect with female clients and prospects need to understand their ascension up the wealth ladder isn’t about wielding power or portfolio size. Rather, they’re more focused on “a holistic approach to wealth that prioritizes family security and philanthropy alongside portfolio growth.”
“We are seeing a transformative era where women are focused on growing their wealth but also redefining its purpose, integrating personal values with financial success," said Angie O'Leary, Head of Wealth Strategies at RBC Wealth Management. "This change recognizes that the growth of women's wealth is not just a statistic but a testament to resilience, innovation and their capacity to carve out a legacy infused with purpose."
Of course, women’s financial desires aren’t uniform across age ranges. Boomer are focusing on durability, stability and wealth preservation whereas their millennial counterparts are embracing technology and willing to take risk. In the middle, Gen X women are flexing resilience as the lone generation contending with both raising their own families while caring for aging parents.
They’re all women, but due in large part to age, they have different financial goals and needs. Advisors need to be hip to that fact.
More Points to Ponder
The aforementioned demographic considerations are crucial because they underscore another important point: How women build wealth differs among those three generations.
“While investments remain the primary source of wealth for all generations (86-92%), Millennial women are far more likely to cite business ownership and innovation (62%) and executive roles (43%) as key drivers of wealth, compared to just 20% and 22% respectively for Gen X women and 10% and 14% for Boomer women,” observes RBC.
There are also some “battle of the sexes” elements for advisors to examine, one of which refutes some old notions about risk-taking.
“Millennial women surveyed outpaced men in higher total and investable assets, signaling a new era of financial dominance among younger wealthy clients,” according to RBC. “The survey found no significant difference between women and men across generations in engaging with higher-risk investments, contrary to traditional views suggesting higher risk tolerance among men.”