The Changing Role of Women in Managing Family Wealth

For decades, a steady shift in financial and economic power has been underway. Today, more than half ($14 trillion) of all personal wealth in the U.S. is controlled by women. It’s an unprecedented financial empowerment that’s only expected to strengthen—reaching $22 trillion within the next 10 years as women inherit funds in the great wealth transfer from their Baby Boomer parents.Disclosure 1

Women are increasingly making investment decisions for a larger portion of the country’s wealth. Women currently control a little more than half of U.S. personal wealth, or $14 trillion. That amount is expected to reach $22 trillion within 10 years and then increase even more rapidly as women inherit funds through the “great wealth transfer.”

Women today are more educated, engaged, and independent than ever before. They earn 58 percent of all undergraduate and advanced degrees, and nearly half (44 percent) have become their family’s primary breadwinner.Disclosure 2 As a result of this emerging empowerment, more women are stepping up to take an active, hands-on role in the management of their family’s growing wealth.

A different approach to financial planning

Women tend to focus their financial plans around specific life goals for themselves and their families instead of obsessing over investment performance. They’re much more inclined to view money as a means to an end (protecting and caring for their family and living fully) rather than as a scorecard of personal success. As such, women generally assign far greater significance to long-term goals such as retirement, education, and legacy planning.Disclosure 3

From an investment perspective, women are often a lot more risk aware and therefore better diversified in their portfolios than men. They typically place a higher premium on asset protection and preservation in hopes of not outliving their retirement savings.Disclosure 3  This can lead women to pay closer attention to life and long-term care insurance planning as well as to exploring guaranteed lifetime income solutions.

These important behavioral tendencies—patience, a long-term, goals-based perspective, and risk-aware diversification—make up the essential qualities of any successful investor. And women seem to have a clear gender advantage in this regard.

Making a positive impact on others

Whether through a socially responsible investment strategy or philanthropy, women are using their wealth as a means to engage with others in impactful, life-changing ways, and as a teaching moment for the next generation—to help them become more aware, empathetic and compassionate people. If this is an area of interest, your advisor can help you explore strategies designed to balance your need for return with your desire to make the world a better place.

Addressing retirement realities

Women don’t just think differently about wealth and retirement; they also face a very different retirement reality. Women’s incomes still lag those of men for a variety of reasons (e.g., the gender pay gap and critical earning years lost to child-rearing and caregiving). Yet greater longevity means you’ll need to save even more for retirement than men.

Longevity also brings with it higher lifetime healthcare expenses, as well as an increased probability of needing some sort of long-term care. In fact, a woman retiring today can expect lifetime insurance premiums and out-of-pocket medical expenses in excess of $350,000; not including the cost of any long-term care.Disclosure 4

The need to take the initiative, get more actively involved in financial planning, and make sound, wise investment decisions has never been more important.

Working as a financial team

Today, women want to be in control of their families, their careers, AND their wealth. Unlike men, who are more inclined to jump head-first into trying to do everything by themselves, women tend to seek out the opinions, insights, and expertise of others—educating themselves on a subject before ultimately deciding on a particular course of action.

This tendency towards collaboration is one of the reasons why Truist Wealth seeks female wealth advisors—women who themselves are balancing career, family, and health and who share your hopes, concerns, and challenges.

Regardless of whether you’re just starting your wealth journey or taking over the financial reins due to divorce or the death of a loved one, there are certain qualities in an advisor you should seek out. Make sure they’re far more focused on talking about planning rather than investment products. Look for a strong commitment to ongoing dialogue and frequent communication. Perhaps most importantly, find an advisor who values and embraces a team approach to wealth management instead of someone who works as a lone wolf.

Eager to step-up and start taking a more active role in financial planning for your family? 

Contact a Truist Wealth Advisor