Women and wealth

A changing dynamic

Wealth and demographics

Women are increasing their wealth – some by necessity, some by the demographic shift underway that is seeing trillions in wealth transfers. Here we look at the growing trend of women as investors – and what may be holding many back.

Gen X (born between 1965-1980) are heading towards retirement while ageing baby boomers approach 80. With these demographic shifts will come a wealth transfer likely to see a greater number of women control financial assets, according to a McKinsey report¹. With women typically living longer (about seven years more than men worldwide²), they represent a $30 trillion opportunity in the U.S. by the end of the decade, the report reads. As such, success in financial services for advisers and wealth managers may come down to their need to understand women’s preferences when it comes to managing money.

In 2023, NMG Consulting, sponsored by BNY Mellon Investment Management (BNY Mellon IM), surveyed consumers, industry experts and retirement advisers and noted changing family structures as a progressive trend. “Those approaching retirement now have multiple obligations, including supporting university-aged and adult children, as well as elderly parents,” NMG’s research

Did you know?

The global financial system could be as much as US$3.2 trillion richer if women invested at the same rate as men.

Three key barriers:

Confidence - just 28% of women feel confident about investing.

Income - on average women think they need around $4,000 in disposable income each month to invest.

Risk - around 45% say investing is too risky for them.

(Source: BNY Mellon's Pathway to Inclusive Investment research 2022.)

noted. It also highlighted divorce at retirement as another trend affecting financial advice. Today (2024) more than one in three people divorcing in the U.S. are over the age of 50, which means the number of single retirees is on the rise – expected to surpass 14 million by 2038.³ Consequently, such trends are serving to highlight the importance of women and financial security and choices.

According to global research into women and investing published by BNY Mellon IM in 2022, 63% of women surveyed believe investing will enable them to provide for themselves in retirement.

The “Pathway to Inclusive Investment” report cites 79% of women in the U.S. believe investing could help achieve greater financial independence.

Historically, the industry has marketed wealth products to women based on financial provision for their families;

Voices from BNY Mellon : the value of mentors

today, investing in independence appears more important than financing dependents. Motivators around retirement and independence are rated even more highly than growing a financial legacy for their family, for example (cited as important by 57% of women), according to the “Pathway” report.

According to a report from the Boston Consulting Group (BCG), women have more than a third of the world’s wealth under their control – and it's growing. They are increasing their wealth faster – adding some $5 trillion to the wealth pool globally each year and outpacing the growth in the overall wealth market.⁴

“I see my role as a guide, someone who champions workplace collaboration and inclusivity.

"Diverse viewpoints, I believe, are the fuel that fires creativity and can generate superior results.”

Jessie Chen, head of Taiwan at BNY Mellon IM

Bianca Okolie, chief of staff for BNY Mellon Securities Services & Digital

"Mentorship has been pivotal in shaping my career and has guided me through very challenging, yet exciting times. I have been fortunate to have many different mentors and hope to fill that role for others.

"I try and encourage more women in this industry by channeling my most recent mentor from the 30% Club Cross-Company Mentoring Program. The ability to work through professional scenarios in a judgement-free zone has propelled my career to new heights enabling a confidence in myself that I hope to help others attain."

BCG's report states: “Too many banks and firms rely on broad assumptions about what women are looking for, resulting in products, services, and messaging that can feel superficial at best and condescending at worst.”

BNY Mellon IM's “Pathway” research found a similar thread. Over 85% of asset managers interviewed in the research admitted their default investment customer was a man. A further three-quarters of asset managers (73%) stated their organization’s investment products were primarily aimed at men. As a result, potential female investors are met with language, imagery and messaging targeted mainly at a male customer. This often includes the use of high-risk metaphors, such as those used in extreme sports, and the concept of high performance and achievement as a shorthand for investment success.

McKinsey & Company: Women as the next wave of growth in US wealth management. July 2020 2. Harvard Health. Why men often die earlier than women. June 2020. 3.CNN Health: More baby boomers are living alone. August 2023. 4. BCG: Managing the next decade of women’s wealth. April 2020.