Top Picks: Celebrating Women in Wealth

Happy International Women’s Day!?

Women in America control more personal wealth than they ever have and they’re also in the workforce at the highest rate in U.S. history, says Emily Barczak, Insights Leader, U.S. Intermediaries at T. Rowe Price.

Given this encouraging backdrop, Barczak told Asset TV’s Women in Finance panel that it’s important not to miss this opportunity to engage women investors.?

“Simply from a numbers perspective, 80% of women at some point in their lifetime will be sole decision-maker, all things money, all things investing, all things finance. From an advising standpoint, there's opportunity to engage women investors.? Women outlive men, their spouses and husbands on average five years, a little over five years. And what we know to be true, and unfortunately, many of the advisors that I work with and I speak with and speak to know this stat that 70% of women when they lose their husband, when their spouse dies, they leave the existing advisor if they'd been working with one. We see these trends and changes that really drive the relevance of engaging women investors from an advisor standpoint.”?

Despite women’s increasing control of wealth, the gender gap remains, says Lisa Harris, Senior Program Manager for Retiree Inc.

“We're still seeing a bit of a gender gap. The 2023 Department of Labor and Statistics still shows that women are making about 84 cents to the dollar against men. We see that varying in different demographics, so not only should an adviser consider that difference and the impact on the woman, but also those that are leaving the workforce for a period of time, especially those between 35 and 44, who are coming home, to take care of either children at home or aging parents. So what we see then, the outcome of that, is about 19% lower in Social Security benefits because of those factors. So that is a pretty significant impact that means we have to think differently about how they make that claiming decision. So, really, meeting women where they're at, where they have valid concerns and stresses and fears for these very reasons—seeing lower numbers, to begin with, is an important positioning point for advisers to start with.”

However, the good news is that the wage growth gap seems to be narrowing. According to Bank of America internal data,

“the difference in median annual income growth between men and women has fallen to around 4% at the end of 2024 from 6.5% in 2022.”

Bank of America notes that this shift combined with the Great Wealth Transfer should set women up to be key drivers of economic growth.?

Sallie Krawcheck, CEO, and Co-Founder of Ellevest, is also hopeful that the Great Wealth Transfer will bring positive change, expecting it to accelerate what she calls “feminization of wealth.”

“I'm going to be more optimistic now because we are looking right at the Great Wealth Transfer where the boomers have accumulated record amounts of wealth, and the gentlemen boomers are beginning to hit 79, 80. And we all know what happens after they hit 79, 80... We think a lot about the money going to the kids. The money goes to her first because of course she lives six to eight years longer than he does, 50% of marriages end in divorce. And we think a lot about when that happens, what is that world going to look like? And it's going to be pretty great when women have the majority of money. We call it the feminization of wealth.”?

Krawcheck adds that women tend to put their money to work differently, which could also drive positive change in another way.?

“And what we're seeing with the feminization of wealth is that women are more likely to invest for positive impact. They're more philanthropic, they invest more money in their families. You see these little bits of these hints of what it's going to look like with a Melinda Gates who recently came into money coming out of the Bill and Melinda Gates Foundation, and really turned around immediately and began investing in another women. You see it with McKenzie Scott Bezos and the money that she's given away. You've seen it with Dr. Gottesman here in New York, donating so that young people don't have to pay medical tuition. Women just use money differently and invest in each other. And so I think the world over the next 10 years could prove to be quite different than the world over the past 10 years. And I would just urge everyone to remember, it's not a zero-sum game. It isn't that this group wins and this group loses. As women really step into their economic power, there's a really positive ripple effect. The economy can grow.”?