Women and Wealth: Navigating the Great Wealth Transfer

Women are taking charge and outperforming men in aspects of investing.

The financial landscape is undergoing a historic transformation as the “Great Wealth Transfer” approaches, ushering in a new era of prosperity for younger generations. The “Great Wealth Transfer” refers to the massive intergenerational shift of assets and wealth that is occurring as Baby Boomers, who are currently the wealthiest generation, pass on their assets—estimated to reach a staggering $84 trillion–to younger generations, particularly Generation X and Millennials.1 This phenomenon has significant implications for the economy, financial markets, inheritance laws, and societal trends, including potential shifts in philanthropic giving and investment patterns.

Over the next two decades, as trillions of dollars will change hands, women are poised to inherit a substantial share. The exciting news is that women are not just passive recipients of this wealth; they are actively taking charge and outperforming men in various aspects of investing.

Steady Progress and Resilience

Recent research indicates that women are modeling healthy investing behaviors. In times of market turbulence, women exhibit remarkable resilience, with 51% staying the course during market dips, outperforming their male counterparts at 43%. This steadfast approach reflects a growing confidence and understanding of long-term investment strategies among women.2

Active Participation in the Stock Market

A notable trend emerging in the financial landscape is the increasing presence of women in the stock market. A staggering 60% of women are actively investing, showcasing a proactive approach and a willingness to navigate the dynamic nature of the market.3 What sets women apart is their less reactive stance toward recent market ups and downs, demonstrating a strategic and forward-thinking approach to wealth management.

Seeking Financial Guidance

In addition to their active involvement in the market, women are also seeking financial guidance in unprecedented numbers. According to Fidelity’s October 2023 research, there has been a remarkable 19% increase in women seeking financial advice since 2019, surpassing the 16% increase observed in men. This shift indicates a growing recognition among women of the importance of informed decision-making and the value of professional financial advice.4

Closing the Gender Investment Gap

The rise of women in investing is not only a testament to their financial acumen but also a step towards closing the gender investment gap. Historically, women have been underrepresented in the financial world, but this trend is changing rapidly. The ‘Great Wealth Transfer’ provides a unique opportunity for women to shape their financial futures.

Empowering Future Generations

As women take the lead in managing and growing wealth, they are not only securing their financial well-being but also empowering future generations. The knowledge and experience gained by today’s women investors will serve as a foundation for financial literacy and resilience in the face of economic uncertainties.

Redefine the Narrative

The ‘Great Wealth Transfer’ presents a historic opportunity for women to play a central role in shaping the financial landscape. The data speaks for itself – women are not only set to inherit significant wealth, but they are also actively participating and excelling in the world of investing.

By staying the course during market volatility, actively engaging in the stock market, and seeking financial guidance, women are demonstrating a commitment to long-term financial success. As the wealth transfer unfolds, women have the power to redefine the narrative and inspire future generations of female investors.

The future of finance is increasingly becoming female, and the possibilities are boundless.

Capital Advantage specializes in helping women build a clear roadmap to a secure future. As your financial advisor, we will help you design and implement a financial strategy that clarifies and supports your needs for today and dreams for the future. We’ll create an actionable plan to meet your goals and help you prioritize the steps you need to take to get there.

Source: Financial Media Exchange, 2024

  1. https://www.cerulli.com/press-releases/cerulli-anticipates-84-trillion-in-wealth-transfers-through-2045
  2. https://newsroom.fidelity.com/pressreleases/fidelity-investments–study–women-tapping-into-their-financial-superpowers-to-gain-ground-with-thei/s/f912c67e-75e9-4398-9ea8-dd6e196005a4
  3. https://www.fool.com/research/women-in-investing-research
  4. https://newsroom.fidelity.com/pressreleases/fidelity-investments–study–women-tapping-into-their-financial-superpowers-to-gain-ground-with-thei/s/f912c67e-75e9-4398-9ea8-dd6e196005a4

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The Author: Capital Advantage, Inc.

Capital Advantage’s editorial team is dedicated to providing our clients with relevant and timely insight into key financial planning topics.