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The $124T Great Wealth Transfer Is Decidedly Female

It’s a major opportunity for advisors who make an effort to tailor their services to women and spouses, but advisors are playing catch up.

Photo of a woman counting hundred dollar bills
Photo by Sasun Bughdaryan via Unsplash

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The Great Wealth Transfer is looking decidedly female. 

Women are expected to inherit the lion’s share of the much-talked-about $124 trillion wealth transfer happening over the next two decades, with some $40 trillion being transferred to widowed women, according to a Cerulli report. Because women statistically outlive their husbands, the “horizontal transfer” means women will take the reins in important financial decisions. It’s a major opportunity for advisors who make an effort to tailor their services to surviving spouses, but unfortunately, advisors are playing catch up. Some 70% of widows switch advisors within a year of an inheritance. 

“Building the relationship with both spouses is not only important, but essential,” said Vanessa Martinez, CEO at Expressive Wealth. “There are transactional people and relationship people: Most women want a relationship.” 

Man, I Feel Like A Woman

There are also differences between how men and women prefer to engage with their finances and financial plans, even if those distinctions are nuanced, the report found. Women, for example, are much more likely than men to prefer that advisors lead with financial planning and other strategies — not just investments. Philanthropic and sustainability goals are also more top of mind for high-net-worth women than men.

“Women care more about trust and relationships,” said Cerulli analyst and the report’s author Chayce Horton. “Men typically care more about services, investment performance [and] managing risk.” Long-term financial planning, ESG criteria, and making sure children and grandchildren are taken care of are also top of mind for women. The report found:

  • Some 9 out of 10 high-net-worth firms said partners are at least somewhat involved in the financial planning process. Of those clients, over 80% of assets are retained after an inheritance.
  • Women (53%) said relationships are more important when choosing an advisor than men (42%).

“Firms that can provide direct support for women will have a tailwind for decades to come,” Horton said.

Put a Sock in It. The good news is there are ways to get ahead of the wealth transfer. Recruiting women advisors is one way to help build relationships with women clients. That includes establishing recruiting and mentoring programs for advisors and having dedicated resources that emphasize topics like financial planning and philanthropy, according to Cerulli.

Martinez said advisors who stop talking, and instead give room for both spouses to speak often end up with a much better understanding of their clients, and build stronger relationships. “Remember the rule for crossing the street?” she told The Daily Upside. “Stop, look, and listen.”