Why It's Important to Talk About Women's Wealth

We hear from Amy Hart Clyne, Chief Knowledge and Learning Officer at Pitcairn, on why there should be more focus on managing the wealth of women, and the factors that could impact the wealth of women this year.

Clyne’s recently published book, “Finding Her Voice & Creating a Legacy,” helps tell the personal stories of female leaders and matriarchs who are challenging paths and offering valuable lessons for family stewards and the advisors serving the world’s wealthiest families.
 
What were the big trends and issues that impacted the wealth of women in 2021?
 
A few of the headlines that I followed closely in 2021 involved women taking on more leadership positions at top financial institutions, further solidifying the fact that female leaders are breaking the glass ceiling. Likewise, it is clear that women’s voices and opinions are becoming increasingly heard and valued. 
 
In 2019, McKinsey research found that there was a significant increase in women taking on upper management roles in corporate America in recent years. One finding was that 44% of companies had three or more women in their C-suite, up from just 29% in 2015. It is important to mention that in financial services, a highly male-dominated industry, women accounted for more than a third of board seats in 2021.
 
Such a colossal move was supported by significant Wall Street players such as BlackRock and Vanguard. Both companies helped women increase their presence on boards by voting against all-male slates of directors. Even though men continue to hold the majority of board seats, there is increasing momentum towards gender diversity. Support by influential corporations is truly paving a path for a better and more inclusive future.
 
In 2022, what are some of the trends and issues that women are focused on or could impact their money in the new year? 
 
A few areas in 2022 that are important and worthy to look at, regardless of gender, are: Projected increases to interest rates, tax law, rising inflation, and market volatility.
 
Given these significant trends, it’s incredibly important for women to create a comprehensive wealth plan with the help of an experienced advisor or family office representative who can help them understand their full financial picture including their family dynamics in order to empower them to make the right decisions for their future and contemplate how they bring in the next generation into discussions around wealth and wealth creation/preservation. The more that women are brought into wealth planning discussions, the stronger their futures will be!
 

Why should there be more focus on managing the wealth of women? 
 
The most crucial reason is that women simply live longer than men. As women live longer, we are expecting a great wealth transfer to come, with women emerging as the biggest beneficiaries. Approximately $30 trillion in wealth is set to change hands in the next decade and women are poised to inherit a sizable share, according to research done by McKinsey & Company in 2020.
 
Women’s needs are growing, and they are unique, and it is interesting to see if the wealth management industry will make more meaningful shifts around female advisors. My research supported that women of wealth are generally less comfortable making these kinds of financial and investment decisions. They need support and empowerment that can be best achieved by learning best practices from women experts and women alike. 
 
In many ultra-high-net-worth families, the roles of women are still hindered by long-standing conventions and complex intergenerational dynamics. Although these women control a significant percentage of the world’s wealth (more than $10.9 trillion in assets in the U.S. alone), serve as CEOs of more than three dozen Fortune 500 companies, oversee many philanthropic programs and initiatives, and play an increasing role in shaping the philosophies and priorities of future generations, their contributions are often overlooked. 
 
For example, 2021 marked a historic record year for women-led IPOs. Even with the number of challenges women face while building and funding their businesses, they manage to succeed and take their companies public. But at this point, they face a completely different set of challenges related to post-transaction, legacy and succession planning. 
 
How do women manage their money differently than men do? 
 
If there is a difference in how men and women manage their money, it can be traced back to different basic attitudes toward money and wealth. Women tend to focus more on life goals and on the family’s legacy, on the things that money can do. Above all, women want to be treated fairly in relation to access and control of family wealth and have artificial barriers within the family removed.
 
In doing the research for "Finding Her Voice & Creating a Legacy," we found a growing number of women holding leadership roles in wealthy families who are challenging traditional gender roles. We call them the “new matriarchs.” Although some of the younger women bristle at the term, we mean it with the deepest respect because they are taking the traditional matriarchal construct and reshaping it as caretakers and corporate leaders, family stewards and financial stakeholders.
 
They are advocates and models of greater equality, as well as examples of what women’s sensitivity and gender experience can bring to family leadership. We also found a prevalent attitude among these women that they are stewards rather than owners of their wealth. They expressed concern about the responsibility of ensuring that the family’s wealth exists to benefit future generations. 

This interview originally appeared in our TradeTalks newsletter. Sign up here to access exclusive market analysis by a new industry expert each week. We also spotlight must-see TradeTalks videos from the past week.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

Personal Finance