Money Marketing: Preparing for the Great Female Wealth Transfer

The Great Wealth Transfer from baby boomers to Gen X and millennials is often discussed, but with 70% of inheritances projected to go first to women, the industry isn’t talking enough about the Great Female Wealth Transfer.

It’s a disruptive force in the global wealth landscape, given that the industry was designed mainly around male clients, and those that are actively preparing for it will have a competitive advantage as the transfer happens.

How do we know this will be disruptive?

The data already shows that 80% of widows leave their deceased husband’s financial adviser within 12 months, with the main driver being that women feel excluded in their partner’s relationship with the wealth manager. Personalising the wealth management journey and experience for women can create a competitive value proposition for client retention and growth.

Much of the industry discussion about disruption has pointed to technology as the solution for more personalised services for clients. While artificial intelligence and other transformative technologies may help meet evolving needs in client services, administrative functions and portfolio management, treating them as a silver bullet is a mistake, as technology is only one piece of the equation.

As a result, the basics of building a trusted relationship matter now more than ever.

Evolving an industry mindset

Technology might be part of the solution, but it’s important to understand the context of how to apply it. Wealthy women don’t just want a tool that will serve up investment recommendations and insights – they often think differently than men about risk, impact, family and community.

For example, women are often interested in ensuring their investments are aligned with their values, keen to explore alternatives and private credit, and are drawn to community and longer-term family goals. Unless wealth managers take the time to reimagine the business model and advice process for women, technology alone won’t help them achieve their goals.

Organisations must also consider whether they have the talent and skills to cater to a rapidly changing client base. The current make-up is male-dominated, and while there are positive moves to increase diversity — not just of gender and ethnicity, but also of thought, education and experience — the industry must do more to make itself representative of and thoughtful towards a growing cohort of female clients.

Industry training and recruiting initiatives will be crucial to grow the talent pool.

Empowering diverse talent

Disruptive talent is usually a term associated with transformative technologies and innovative gadgets. If the industry recognises that disruptive talent is simply defined as individuals who can help organisations think differently and solve real problems, it can open the door to faster and more meaningful problem-solving.

Disruptive talent doesn’t have to sit in an innovation or technology department — it includes individuals who think differently about client acquisition and client service, know how to build community, have expertise in impact and more.

Creating an open culture

Finding and acquiring disruptive talent is only step one — leveraging their potential requires a culture in which people from all backgrounds and experiences can thrive.

It’s crucial to listen to employees and foster an environment in which individuals and teams feel they can share ideas and all types of feedback. An open working culture, where individuals feel included and empowered to speak up, specifically increases engagement, opens up opportunity and drives innovation. An honest assessment of culture will lead organisations down the right path.

Wealth-management organisations are beginning to realise that the upcoming transfer of wealth to women — and the next generation — will be a major administrative undertaking, and also a seismic demographic change to which they must adapt. With the right technology, tools, and talent, they can seize the opportunity.

As with every industry disruption that the industry has faced in history, it will be those with the right mindset, talent and culture that will lead as client needs and business models shift.

Important information

The following information can be sourced to Rethinking 65:

• 70% of inheritances are projected to go first to women.

The following information can be sourced to Advisorpedia:

• 80% of widows leave their deceased husband’s financial adviser within 12 months.

The following information can be sourced to HBKS Wealth Advisors:

• Wealthy women often think differently about risk, impact, family, and community.