A major shift will affect the financial industry in the coming years with women expected to exert greater control over the nation’s wealth, Financial Advisor reports.
This transformation was one of the main topics of a panel discussion at Financial Advisor magazine’s 10th annual Invest in Women conference in Boston last week. It was called “The Transfer of Wealth to Women: Preparing for a Financial Power Shift.”
It was noted that by 2045, an estimated $85 trillion in wealth will be transferred through inheritance, and nearly 70% of it will be controlled by women. Along with inheritance, women have also created a considerable amount of wealth on their own through their careers and business ventures. Overall, women are expected to control over half of the nation’s wealth by 2030.
Another indication of their influence was contained in a report released by the CFP Board: Building Wealth: Insights on Women’s Aspirations & Growing Financial Power. It found 69 percent of women serve as the primary investment decision-makers in their households, while another 56 percent agreed financial planners are in the best position to help them achieve their financial priorities.
At the panel discussion, it was agreed that the financial industry must be prepared to meet the challenges and opportunities posed by the growing influence of women.
“Parity is power,” said Laurie Stack, regional vice president at Avantax and head of its Avantax Women’s Advisor Forum. “It’s a business imperative that must be embraced by everyone—men and women alike. We must ensure that women are positioned to make financial decisions that support their long-term success.”
Another panelist, Caroline Piehl, a partner and advisor at TimeWise Financial, emphasized that financial planners must vary their approach when dealing with women at different stages of their lives. “A woman in her 60s has different concerns than one in her 30s. Understanding these nuances is critical,” Piehl said.
She added that financial advisors will need to understand the nuances involving women who accumulated their wealth in different ways. “Earners tend to be more focused on whether they can recreate their success and may be reluctant to relinquish investment control,” said Piehl. “Inheritors, on the other hand, often face a steeper learning curve and look for education and empowerment.”
Liz Miller, founder of Summit Place Financial Advisors and current chair of the CFP Board, pointed out the increasing interest of younger women in financial matters. “They’re eager to learn and take control,” Miller said. The CFP Board recently launched program known as Accelerate & WIN, that is aimed at increasing the growth, influence and leadership of women in the financial planning industry.
Younger women are also seen as more likely to want digital tools and real-time access in their relationships with financial advisors, who will need to embrace both traditional and modern methods in their practices.
Another topic of the discussion was the willingness of women to take on more risk when it comes to their financial planning. “It’s not necessarily about risk aversion—it’s about purpose,” said Erinn Ford, Osaic’s executive vice president of advisor engagement. “Women often think holistically about their wealth, especially in terms of legacy, caregiving and supporting others.”
“It’s not that [women are] risk-averse—they want education. And when we provide it, we often find their risk tolerance aligns closely with male clients,” added Miller.
The attorneys at Lewitas Hyman include former senior attorneys at the SEC whose legal experience and industry knowledge make them uniquely qualified to provide counsel on securities regulatory, compliance and enforcement matters. Our attorneys fully understand the regulatory scrutiny financial professionals and their firms face from the various regulators that oversee the financial services industry. If your firm is facing an investigation from a regulatory agency, please contact Lewitas Hyman at (888) 655-6002 or through our online contact form.
