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The investment community loves buzzwords and catchy acronyms and while “SHEeconomy” is memorable, it’s relevant for advisors to properly understand and not delay that objective.
SHEconomy isn’t just another Wall Street catchphrase. In fact, it hasn’t been getting much attention of late, but the underlying principle should be garnering focus, particularly among advisors. The SHEeconomy is, in part, rooted in notions such as women increasingly being highly educated, climbing the corporate and closing the pay gap.
There’s still work to be done on those fronts and others, but the point remains that the SHEconomy is a credible and massive economic force. As Morgan Stanley notes, women contribute $7 trillion annually to U.S. GDP. That’s trillion with a “T” and further confirms that advisors would do well to improve connections with female prospects and convert them into clients.
Time is Now to Dispel Old Narratives
Perhaps the primary headwind to the SHEconomy garnering more acclaim, and it’s one that advisors need to get over and quickly at that, is the notion that in most households men are the primary breadwinners. That’s changing with many women earning close to or more than their male partners.
On the surface, all that says is women are moving up the ranks in terms of earnings, but a deeper examination just how relevant that fact is to advisors and the broader economy.
“In addition to the growing number of women in the workforce and an increase in their spending power, 78% of women identify as the primary household shopper,” according to Nationwide. “Historically sidelined in financial narratives, women are now at the forefront of economic change, fostering new market trends, and reshaping the financial landscape. Studies suggest women control about one-third of world wealth, and their financial power is expected to rise. This shift has wide-reaching implications that demand attention from the financial industry.”
Advisors that have been in business awhile and those that are baby boomers may be apt to remember the importance of the Equal Credit Opportunity Act, which paved the way for women to get their own bank accounts and credit cards. That legislation paved the way for material change that resonates today – something else advisors need to be aware of.
“Since then, women have progressed to owning businesses, buying homes, and becoming the primary income earners of their households,” adds Nationwide. “And with more women in high-paying jobs and leadership roles, their economic impact is expanding. Educational attainment among women is also on the rise, leading to increased earning potential. Moreover, societal shifts like delayed marriages and childbearing give women more time to focus on their careers and personal investments.”
Yes, Advisors Need to Care
Here’s at least one clear data point pertaining to why advisors need to care about the SHEconomy. According to McKinsey research, in just seven short years, women will control the majority of the $30 trillion of wealth accumulated by baby boomers.
That’s just one example, but it underscores the point that advisors need to be aware about the financial issues that are most important to women and develop plans accordingly. Those include cost of living, Social Security and Medicare being cut and retirement planning/savings.
“For financial professionals, this means recognizing the unique financial journeys of women, their growing economic clout, and the opportunities they present,” concludes Nationwide. “As the landscape evolves, those who adapt will thrive in the dynamic and diverse economy of tomorrow. Embracing this so-called Sheconomy isn’t just good practice—it’s essential for those who want to succeed in a world where women are not only participants but leaders and shapers of the economic narrative.”
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