We have just begun what will be the greatest transfer of wealth in human history. Between now and 2045, it is estimated that some $84 trillion of wealth will be passed down from older Americans (mainly Baby Boomers) to their heirs (largely millennials and Gen X). 

For a variety of legal and social reasons, this transfer will look dramatically different from those of the past. One major aspect of that difference is the number of women who will be the beneficiaries of these transfers and the amount of wealth they will then control.

According to a recent study, in 2020, women controlled $12 Trillion in assets. That number is expected to reach $30T by 2030 due to a combination of two factors:

• One, women statistically outlive men by 5 years, meaning women in the Baby Boomer generation will be taking control of their family wealth prior to passing it to their heirs. 
• Two, the portion of households where a woman is in charge of finances has risen quickly and continues to rise.

While women are increasingly taking control of an increasing amount of wealth, the financial services industry, as a whole, has done little to address this changing face in wealth. The result according to the above-mentioned report, 70% of women report changing their financial advisors within one year of their partner dying.  

Why?

Affluent women approach wealth management differently than their male counterparts. Specifically:

• Women are more likely to seek professional advice and less likely to feel confident about their own skill at financial decision making. 
• Female decision-makers tend to be less risk-tolerant and more focused on life and other goals. 
• In seeking an adviser, they tend to place more emphasis on a personal fit and are more likely than males to identify a life event as their motivation to seek guidance.

Let’s look at each of these in turn.

Less Financial Confidence

A constant across surveys of affluent women is a feeling of insecurity that is born of a lack of confidence in their decision-making abilities around financial planning. Only 25% of women surveyed say they are comfortable making investment and savings-related decisions (versus 40% for men).  

At Stavis Wealth Transfer Solutions, we believe a well-informed client is in the best position to make decisions that optimize their estate for the benefit of both their families and charitable passions.

This is why we believe it is important to impart our knowledge to educate our clients. Rather than using jargon or purposely complicated materials in an attempt to impress or overwhelm clients, we provide highly visual and easy-to-understand materials. This enables our clients to envision a comprehensive picture of their current and future estate plan.

Less Risk Tolerance

A 2020 study published in the Harvard Business Review confirmed what many others had posited - women tend to be more risk averse when it comes to investing, preferring capital protection to alpha generation. In other words, women tend to be more concerned about outliving their assets in retirement and having enough savings for retirement.  

That same HBR study did show another interesting difference between women and men. When it comes to what the authors call “social risk,” women are actually more willing than men to take such risk. By social risks, they refer to “decisions that have important human or social consequences, in addition to financial ones.”  

A recent survey by the Economist Intelligence Unit seems to confirm these findings. In their survey of 1,051 HNWI’s with at least US$1 million in investable assets, women were more likely than men to align their investments with their giving goals, thereby not only trying to increase their wealth, but also help others.

At Stavis Wealth, we recognize the importance of developing a purposeful philanthropic strategy that goes beyond "checkbook philanthropy."  We work closely with our clients to create an intentional philanthropic plan, ensuring contributions align with your passions and values. This approach, coupled with collaboration among philanthropic specialists, optimizes strategies for meaningful impact.

More Personal Fit

Over half of women say finding an adviser who is a good personality fit is a prerequisite for working with them. This is a full 10 percentage points higher than men. Areas where women report gaps between themselves and their advisors include:

• Feeling shut out of household wealth discussions; 
• Adviser teams reaching out to them infrequently or only on matters of day-to-day cash management, rather than bigger investment decisions;
• Feeling they could ask basic financial-literacy questions; or 
• Not being able to spend enough time with advisers to find the right financial plan to meet their goals.

As a firm co-founded by three women, we understand that women have not always been included in important financial conversations. We understand the issues that women have historically faced and make it a priority to be inclusive. Crafting a comprehensive estate plan for a family is a personal experience and demands your advisors take the time to truly understand you and your goals, concerns, and needs.

Conclusion

The face of wealth is changing and women are increasingly becoming the decision makers when it comes to wealth management and estate planning. However, the industry is slow to adapt to this change and address this new reality. 

At Stavis Wealth Transfer Solutions, we are uniquely positioned to address this change and work with all our clients to optimize the preservation and smooth transfer of assets across generations.

To learn more, feel free to reach out to the Stavis Wealth Team .