What is the great wealth transfer?
New research has found that the great wealth transfer is under way and it will be women and not men who will hold the most wealth in the years ahead.
Of course, I would hope this was because of the skyrocketing numbers of female investors – and that day will hopefully arrive – but the reason for this shifting financial balance of power is simply due to longevity.
That is, by 2025, it is estimated that women will hold 60 per cent of Britain’s wealth, having inherited most of it from their deceased spouses, according to the Centre for Economics and Business Research. We can safely assume that these statistics are relevant for most other developed nations around the world, too.
Yet a survey from Schroders found that only seven per cent of wealth managers have dedicated strategies in place to retain, attract, and advise female clients – which is another issue entirely.
According to a Financial Times report, a large portion of Britain’s wealth is currently held by the baby boomer generation, born between 1944 and 1964, most often by couples, in which men frequently manage the finances.
But that situation is set to change, as men of this age pass on and women, on average, outlive their husbands and assume independent control of family wealth, the report said.
This wealth transfer will put pressure on the money management industry, which for decades has been geared toward courting male clients, according to financial advisers – sigh….
Indeed, according to the report, many firms have long been preoccupied with generational wealth transfer, which is when children inherit assets from their parents, and not when women simply outlive thier male partners.
Of course, the great wealth transfer is already under way, given that many baby boomers are well in into 70s already.
One of the most alarming aspects of the report was that most women admitted that they were not educated enough to manage the wealth transfer – or the joint wealth that they now have sole control over.
On top of that, the wealth management industry has been male-dominated for so long that many women have been reportedly less than keen to seek out a financial adviser after their partner has passed away.
Financial Literacy for Women
Clearly, I don’t work in the financial services industry, nor do I provide any sort of financial advice, but this story underlines a deeper issue in my opinion, which is the historical inequality between males and females when it comes to financial literacy and even financial control or input of combined wealth.
The desire to change this situation is the founding motivation behind The Female Investor – Creating Wealth, Security & Freedom Through Property or TFI as it is becoming increasingly known.
Sure, TFI is about property investment principles at its heart, but fundamentally it is about women taking charge of their own financial future and education sooner so they will have more choices later on.
Baby boomer women have been strong supporters of TFI – often saying that they wish the book had been around when they were young – with many buying a copy for their daughters and grand-daughters as well.
Because that is what we hope to achieve – a new generation of women who are financially capable to manage their own finances and wealth and who can also manage any kind of wealth transfer that heads their way in the years ahead.