Rise of the wealthy woman

An increasing proportion of the richest humans are female, and their unique vision and purpose has deep implications for the wealth management industry

As long as wealth has existed as a theme, it has been dominated by men. But that is about to change: by 2030, women in the US are expected to control much of the $30tn in financial assets that baby boomers will possess. In the UK, as much as 60 per cent of the nation’s wealth is expected to be in female hands by 2025, according to the Centre for Economic and Business Research CEBR.

As the world gears up for the greatest generational wealth transfer in human history, the rise of the wealthy woman has huge implications for the wealth management industry, argues Debbie Wills, Head of Wealth Management for Europe at Standard Chartered Private Banking. “It’s not that women necessarily end up making radically different investment decisions from men,” she says. “But the route they take to get there, and the conversations they want to have along the way, often demand a different approach.”

It’s not that women necessarily end up making radically different investment decisions from men

Shifting demographics

One reason for the growing number of wealthy women is that baby boomer males are coming to the end of their lives, and they typically leave their wealth to their female partners, who tend to be younger and longer lived. A 2020 McKinsey report, for example, shows that women in the US live five years longer than men, on average. Heterosexual women also marry partners who are two years their senior, on average.

According to Wealth-X, which produces research on the world’s wealthiest people, 25.3 per cent of ultra-high-net-worth (UHNW) females – people with more than $30mn in assets – have acquired their wealth through inheritance, compared with just 4.8 per cent in the case of males. But successful female entrepreneurs are also on the rise, particularly in Asia: in a 2023 report, China accounted for 62 per cent of the world’s self-made female billionaires, with a total of 68.

Wills says that one of the implications of this demographic shift is a need for wealth management firms to adapt to the shifting profile of their clients. “Women want to be treated differently,” she says. “They don’t necessarily want to have the same conversations as male investors when they speak to their advisers; it’s not always about how much money they are going to make.”

A change of focus and priorities

Indeed, research suggests that women often have diverging interests from men, which could influence their investment preferences and decisions. Wealth-X, for example, found that philanthropy is a top 10 interest for some 60 per cent of UHNW women, compared with only 35 per cent of UHNW men. At the same time, a 2021 Fidelity survey found that women investors outperform their male counterparts by 0.4 per cent – an amount that leads to significant differences over time.

“Women often focus on long-term financial planning, wealth preservation, sustainable investing and philanthropy,” says Rebecca Gooch, Global Head of Insights for Deloitte Private. “It is also common for them to seek guidance on estate planning and wealth transfer strategies to enable them to take charge of their family’s financial future. Those who accommodate these inclinations can be better equipped to meet the needs of their female clientele and forge lasting, meaningful relationships.”

Women often focus on long-term financial planning, wealth preservation, sustainable investing and philanthropy

To meet those changing needs and objectives, Wills of Standard Chartered says that the financial services industry needs to continue making strides to improve customer engagement and relationships. Here, technology could play a big role, with artificial intelligence now able to fold in more – and more diverse – datasets that help managers provide a unique and tailored experience for each client.

Time for financial services to adapt

Ensuring that more women are represented at the C-suite level in the financial services industry is also essential. According to Deloitte, women still occupy only 18.9 per cent of these positions globally compared with 12.1 per cent in 2012.

Wills says that continuing to close that gap will produce greater diversity of opinion on management boards and investment committees – a change that will feed into serving clients’ changing profile better. “It enhances those conversations,” says Wills. “If you have women represented, and they are coming at things from a different angle, it’s easier for the whole firm to make changes.”

But she also says that, regardless of gender, wealth managers need to be able to adapt better to female investors’ needs, taking into account their priorities and long-term goals. “If you’re a male investment manager, you have to be able to dial into potentially different processes, even if the ultimate investment is the same,” she says. “It’s about being able to tweak the approach wherever necessary.”

This content was paid for by Standard Chartered and produced in partnership with the Financial Times Commercial department