A monumental shift in global wealth is expected to take place in the U.S. over the next few years. By 2030, women are projected to control as much as $34 trillion in financial assets- around 38% of U.S. wealth[1]. In comparison, last year women held roughly half of this ($17.7 trillion[2]). The main driver of this wealth transfer is demographic trends, as women tend to be younger and live longer than their spouses from the baby boomer generation, and as a result are expected to inherit vast sums in the coming years[3].
Beyond inheritance, increasing female workforce participation is also contributing to this shift. Despite women being disproportionally affected by the COVID pandemic due to a greater tendency to leave the workforce to care for dependents attending school at home. However, women were able to bounce back when the economy reopened, contrary to what was expected[1]. In fact, female participation has surpassed pre-pandemic levels[2]. This was due to several factors, notably, greater job flexibility that resulted from the pandemic enabled more women to join the workforce[3]. Furthermore, the chart below shows that female participation among ages 25-54 (seen as prime working years) remains above pre-pandemic levels in all major economies, with South Korea, Australia, Japan, Italy, and Germany leading the gains[4]. In the U.S., Millennial women have been at the forefront of this trend, benefiting most from flexible work arrangements while balancing young families[5].
The global impact of an increase in female participation in the workforce is incredibly significant. If female participation were to rise to 60%, research shows that this increase would boost U.S. GDP by approximately 2.5%[1]. The impact is unsurprisingly even more stark in countries with low levels of female participation- India, for instance, could see a 27% increase in GDP[2] .
Furthermore, the share of female ultra-high net worth individuals (i.e. with wealth of $30 million or more) has increased by 59% in 13 years - from 6.5% in 2010 to 11% in 2023 - due to a combination of self-made fortunes as well as inherited wealth[1].
This wealth transfer is also reshaping the financial advisory industry. Women tend to have different financial priorities than men, with a greater focus on meeting long-term financial goals. A McKinsey survey found that women are especially concerned about outliving their assets in retirement, maintaining adequate savings, and navigating market fluctuations[2]. Additionally, they place higher value on building personal relationships with financial advisors[3]. These reasons among others explain why the 2020 survey found that 70% of women changed advisors within one year of their partner’s death[4].
Over the years our firm has gained considerable experience in wealth management for women, having previously partnered with a divorce settlement firm to support clients through major life transitions. This collaboration gave us valuable insight into the unique financial challenges and considerations women often face, particularly during periods of significant change.
In conclusion, if current inheritance and labor trends continue, women will play an increasingly dominant role in global wealth distribution. This shift will have profound implications not only for the financial advisory sector but also for consumer industries, investment strategies, and economic policies.
Bibliography:
Massive Wealth Transfer Will Give Women $34 Trillion by 2030 | Bloomberg
Women as the next wave of growth in US wealth management | McKinsey
Females remain a driving force in the global economy | NDR