The Great Wealth Transfer: How Women are Poised to Gain a Financial Upper Hand
Forget the glass ceiling, women are about to own the entire building. The upcoming shift in wealth is unprecedented. For the first time ever, women are set to gain most of the inheritance assets from the previous generation. Boomers are going to pass on a massive $30 trillion over the next decade. This marks a historic change in financial power dynamics as the majority of U.S. wealth will likely change from male control to female, primarily going to single Millennial women. Money has long been a tool of power, now, women are poised to take the reins.
This shift will require a change in financial institutions that have been traditionally male dominated, both in the workforce and the clients. This imbalance is mostly because women have been barred from taking part in finances. Laws, until the 1970s, required women to have either a father or husband as a cosigner to gain access to credit cards, bank accounts, and investments. Due to this unjust inequality, men have had control of almost all the financial sphere for generations. Women being allowed access only for the last 50 years means that we are only about one and a half generations removed from women being completely reliant on the men they were related to. They are now playing catch up on the financial front and are rising to the challenge.
Hopefully, financial institutions will take note of this historic transfer of wealth and adjust their tactics to be inclusive and understanding of the differing goals and investment strategies that women possess. Women tend to be goal-oriented in their investing and have specific objectives they are working towards like education or a home purchase. They also are inclined to be careful in their consideration of risk with a high emphasis on preserving the principal investment. With less access to financial education, women often start with less confidence in their ability to manage investments.
An emerging market for financial institutions will be in offering guidance and education that are tailored to their female clients. One way for wealth advising groups to stand out will be by training their workforce about the history of women lacking financial access so they can help these clients become financially literate through communication and mutual trust. Once women explain their fears, interests, and goals they can create a working relationship that will benefit everyone.
The Great Wealth Transfer will likely grow the demand for alternative investments. Women and Millennials show an increased interest in sustainability and socially conscious ways of investing, a growing alternative market. Millennials are a more tech-savvy generation that can easily navigate the apps and platforms dedicated to democratizing all kinds of alternative investments. These options can be tailored to the goals of this inheriting group, whether it’s eco-friendly companies, women and minority-owned startups, or investing in sustainable housing.
This new era represents more than just a shift in asset ownership; it marks a fundamental change in how wealth will be managed and invested in the future. As women gain control of more financial resources, their preferences for goal-oriented, impact-focused investing are likely to reshape the investment landscape, particularly in alternative investments.
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