Millennial Women Are Investing More Money Earlier, Says Schwab

The “Millennial pause” definitely doesn’t apply to investing.

Millennial women — those between the ages of 28 and 43 — have been investing at an earlier age than their Baby Boomer and Gen X counterparts, according to the results of Schwab’s annual Women Investors Survey. They are also much more likely than older generations of women to invest in crypto, options and alternatives.

Since women are the primary beneficiaries of the ongoing “Great Wealth Transfer” — in which $124 trillion is set to change hands — understanding how they plan to invest is key to understanding future trends. Advisors will also need to cater to women’s investment preferences if they want to retain them as clients, experts said.

A Millennial Moment

Millennial women began investing at age 27 — nearly a decade earlier than Boomer women did at age 36, per the Schwab data. Millennial women are also significantly more likely to invest in cryptocurrencies (51%), options or futures (28%), and alternatives (24%) than Gen X and Boomers; of Boomer women, only 7% and 8% have assets in crypto and alternatives, respectively. Millennial women are also more likely to find the fun in investing:

• 51% of Millennial women “enjoy investing” compared with 39% of Gen X and 18% of Boomer women.
• 36% of Millennial women said one reason they started investing was “to learn how to invest,” compared with 23% of Gen X and 11% of Boomer women investors.

Cary Carbonaro, the women and wealth ambassador for Ashton Thomas Private Wealth, said the data shows that women are less afraid to dive into the world of investing. “I’m happy that we’ve got numbers moving in the right direction. It means that women are less risk-averse, they’re more open to the market,” she told Advisor Upside. “What’s really interesting is that it’s happening already now, with the younger women.”

Valuing Values. When speaking to women clients, Carbonaro said certain types of investments tend to have a higher appeal. With first-time women investors, she said, large-caps and S&P 500 indexes are a good place to start but more experienced investors might want their portfolios to reflect their values. “My clients who move up the scale, I also [say], ‘Hey, do you want to put your values in your portfolio?… If you hate guns, we can take guns out of the portfolio,’” Carbonaro said.

Still, women — who value long-term relationships with their advisors — are working with them much later in life, with 35% not hiring one until age 45, according to a recent McKinsey report. This heightens the risk of missing out for firms that don’t reach younger clients early. “Money equals freedom and power,” Carbonaro added, “and women need more of all of that.”