Trending
Advisors are inundated with data points and information regarding the great wealth transfer. They may even be at a point where they can recite in their sleep the line about the $124 trillion in assets moving from baby boomers and the silent generation to their heirs.
What cannot be lost in that shuffle is that by 2030, women are expected to control $34 trillion in wealth – a number that will grow as the great wealth transfer accelerates. So to be clear, a massive chunk of that $124 trillion will be controlled by women. It’s also a call to action for advisors.
Sure, there are some that have brought up the issue of bringing the heirs to the table, which is smart business. More should follow suit. Obviously, there are no guarantees that when a client passes on that their children will stick with the same wealth management firm, but advisors can a long way toward earning that business by being proactive and making heirs feel valued even if they’re not official clients.
Point is if advisors want to retain female clients that are beneficiaries of the great wealth transfer and add those that are heirs of current currents, now isn’t the time to stand pat. Rather, it’s time for action, including developing strategies customized for women experiencing financial windfalls.
For Advisors, Opportunity Abound with Women
Advisors are likely aware of the array of studies confirming that women are more likely to consider working with an advisor than men. With the great wealth transfer ramping up, the industry needs to seize upon that demographic opportunity for a simple reason: women want the help.
“Eighty-four percent of women say they lack confidence in their ability to manage money from an inheritance or financial windfall – a significant contrast compared to 73% of men,” according to a new survey from Citizens. “Nearly half of women (45%) report feeling confused or overwhelmed when it comes to managing their personal wealth, compared to just 27% of men.”
There are also demographic within the demographic trends advisors need to be aware of. Citizens points out that two-thirds of Gen Z women and half of their millennial counterparts have postponed working with advisors citing lack of confidence. As it pertains to the great wealth transfer, that’s concerning because millennials and Gen X will be the first and biggest beneficiaries of that transformative wealth shift. But there’s a bright spot: most women want to meet with a fiduciary.
“The vast majority (90%) of American women expressed a desire to meet with a financial advisor to help them reach their financial goals, with saving for retirement being the highest priority (36%),” adds Citizens.
Understanding Matters
Advisors need to approach female clients and prospects from a standpoint of understanding because their financial goals and needs often differ from their male counterparts.
“For 61% of women, ensuring their children are cared for is paramount when planning for the future,” notes Citizens. “However, more than a third of women (35%) don’t yet have an estate plan, including older generations of women (41% of Boomer women; 37% of Gen X women). This underscores the need for advisors who can navigate the complexities of multi-generational estate and wealth management planning with sensitivity and expertise.”
Advisors should also remember to not overlook young women. Not only is that cohort anxious to invest, but half of millennial and Gen Z women are expecting an inheritance and nearly a quarter believe it could be as large as $500,000.