(Bloomberg) -- Women are controlling ever-greater sums of money around the world, setting the stage for major shifts in wealth management and philanthropy.
In the US alone, McKinsey & Co. expects women to control $34 trillion — or roughly 38% — of investable assets by 2030, close to double last year’s total. The figure was just $7.3 trillion, or 29%, 10 years ago.
The biggest driver of those gains is a simple demographic trend: Women of the Baby Boomer generation outlive men by five years on average, and rich husbands are increasingly leaving their wives in control of family fortunes. The shift is helped along by greater numbers of women pursuing lucrative careers.
“Women are increasingly becoming the financial heads of households due to inheritance, divorce or career success, and they’re taking on leadership roles in financial decision-making,” said Casey Jorgensen, head of the Dynasty Institute for Adaptive Leadership at Dynasty Financial Partners.
It’s a colossal change for women in the US, who couldn’t open a bank account or credit card by themselves 50 years ago. Now, there are hundreds of ultra-high net worth women around the world — including at least 62 billionaires, who control some 11% of the $9.9 trillion tracked by Bloomberg Billionaires Index.
Of course, sizable gender gaps still exist. Women earn just 84% of what men do and occupy only 12% of c-suite positions at public companies. Only 41 of the chief executive officers at S&P 500 companies are female. And while the share of wealth controlled by women had crept up in the past decade, it stood at less than 35% last year.
But as more women join the ranks of the world’s richest, the wealth management industry — known for being primarily male and catering to men — is racing to reshape how it attracts and retains this new group of clients. And since women of all ages tend to donate more to charity than men, philanthropic organizations are slated to receive a new influx of donations.
Global wealth gains
The percentage of female ultra-high-net-worth individuals worldwide — defined as those having wealth of $30 million or more — rose to 11% in 2023 from just 6.5% in 2010, according to wealth management firm Julius Baer. That’s due to a combination of inheritances and self-made fortunes, the researchers found. In the past, rich men who built corporate dynasties would hand their empires over to sons, but now, more women are taking the reins.
In Western Europe, women currently hold about a third of total assets under management at about 4.6 trillion euros ($4.85 trillion), according to McKinsey. That’s expected to grow to 45% by 2030. During that period, women’s assets are slated to compound at 8.1% annually, compared to just 2.7% for men. At that rate, they could approach parity with men by the early 2030s, according to the consultancy.
“There’s a huge economic opportunity for organizations to more readily meet the needs of women,” said Beth Viner, managing director and partner at Boston Consulting Group. “Wealth management was designed when mostly men were head of households. It’s worth stepping back to say ‘are we meeting women’s needs today?’”
Philanthropy
As women control a greater share of global assets, philanthropic organizations are expected to receive more money. Women across all income levels and generations are more likely to donate than their male counterparts, according to research from the Lilly Family School of Philanthropy at Indiana University.
The motivations for philanthropy differ across gender, the school’s research shows. Women tend give based on empathy, while men often donate to further their self-interest. Women also tend to spread their giving across more organizations.
Carey Shuffman, executive director and head of women’s segment at UBS, said age groups vary widely in their giving. Millennial women feel strongly about social justice, equality and climate change issues, while women in the Baby Boomer generation skew toward religious organizations and those focused on reducing poverty.
Wealth management
Leaders of financial advisory firms across the US say they’re adapting their operations to better serve women. Female clients value transparency and collaboration in financial planning more than men do, Dynasty’s Jorgensen said. They don’t just want someone to invest their assets for them — they want to understand what is going on and how investing strategies align with their values and goals.
They also place a higher value on knowing a financial adviser personally before hiring them to manage their money, said Maggie Bilby, vice president at Cyndeo Wealth Partners.
“We have noticed that women do not place as much stock in an adviser’s intellect or credentials, but how the adviser can apply that knowledge in a creative and effective manner,” she said.
Many women— though certainly not all — prefer a female wealth manager, and firms are stepping up their hiring efforts. In 2024, only 24% of certified financial planners were female.
They also have ground to make up in stock-market investing. Just 71% of women reported having stock holdings in Fidelity’s 2024 Women and Investing Study, compared to 80% of men. Still, the figure is up from just 60% in 2023 and 44% in 2018.
Women are more likely than men to describe their investing approach as “conservative,” according to Fidelity, and more than 70% say they wish they had started investing their savings earlier.
“Women do a really great job of saving, but they have worked so hard for that money that they don’t want to risk it,” said Ryan Viktorin, vice president and financial consultant at Fidelity. “That feels good, but it’s actually exacerbating the wealth gap.”