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American women are expected to control a substantial portion of the $30 trillion in financial assets that baby boomers are expected to possess by 2030. However, there might be some key differences in the concerns that men and women possess about money that could have dire repercussions for inattentive financial advisors.
A new report published by McKinsey & Company, "Women as the Next Wave of Growth in US Wealth Management," discusses a survey of more than 10,000 affluent investors, nearly 3,000 of whom were female — and it indicates that compared to 5-years ago, 30% more married women are making financial and investment decisions and that "more women than ever" are the family breadwinner. Another figure shows that 44% of companies have three or more women in their C-suite, an increase of 29% from 2015.
Still, the increase in female involvement with financial decisions hasn't necessarily coincided with changes in the way that financial institutions approach servicing their clientele. "No one has really moved the needle on really finding a way to serve the female segment of consumers and clients," said Jill Zucker, one of the authors of the report.
The results of that dissatisfaction may be most evident in the largest fulcrum driving wealth into the hands of women, which is the 70% of US affluent-household investable assets that are controlled by the baby boomer generation. Per the report, women are outliving their male spouses by 3-5 years and inheriting control of the shared assets once their partner dies.
But many of those widows are looking elsewhere for financial support. Per the report, 70% of women move their wealth relationship to a new financial institution within a year after a spouse's passing. "To me that says we just haven't gotten this right yet," Zucker said.
So what are women prioritizing when it comes to wealth management partners? The report identifies a greater demand for advice, a greater focus on real-life goals and less risk tolerance as key drivers.
For example, the survey indicates that 46.4% of female respondents were concerned about outliving assets in retirement, whereas only 35.7% of men said the same. Likewise, 45.7% of women surveyed said that they were concerned about lifestyle maintenance as opposed to 38.6% men.
Zucker doesn't believe that financial institutions or advisors are oblivious to these needs, just unsure of how to address them. "Institutions know this matters. What we haven't yet seen is something more systematic than collateral and marketing brochures and marketing campaigns," she said.
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Frank Ready
Frank Ready is a reporter on the tech desk at ALM Media. He can be reached at [email protected].
