The Great Wealth Transfer: Opportunities & Implications for Women in the United States

Let’s break it down and what’s about to happen in the next 20 years

Over the next two decades, an estimated $84 trillion in assets is expected to transfer from Baby Boomers to younger generations, with women poised to inherit and control a significant portion of this wealth. This unprecedented shift presents both opportunities and challenges for women, particularly in the realms of financial planning, investment, and wealth management. Let’s explore the implications of the Great Wealth Transfer for women in the U.S., highlighting the obstacles women may face and the critical role financial advisors play in navigating this transition. By 2030, American women are anticipated to control a substantial portion of the $30 trillion in financial assets that baby boomers will possess. Currently, women control a third of total US household financial assets, amounting more than $10 Trillion. This shift is happening as women inherited from their spouses and generational inheritances are started to occur. ITM+1Citizens Bank+1

What is “The Great Wealth Transfer”

The Great Wealth Transfer refers to the massive intergenerational transfer of wealth occurring as Baby Boomers pass on their assets. Women are expected to be primary beneficiaries due to factors such as longer life expectancy and evolving societal norms. Understanding the nuances of this transfer is essential for women to effectively manage and grow their inherited wealth. It’s thinking about not only the impact on inheriting wealth, the idea of understanding how to invest your inheritance, tax liabilities, retirement saving and spending, do alternative investments such as private equity, real estate or private debt fit into the financial plan. To think before any of The Great Wealth Transfer occurs, have the baby boomers set up their estate plans for the wealth to transfer according to their wishes? Let’s dive into key factors to think about.

The Impact on Women – The Primary Beneficiaries

By 2030, American women are projected to control over $30 trillion in financial assets, surpassing the national GDP. New York Post+1Today’s Woman+1
Approximately 95% of the $54 trillion expected to transfer to spouses will go to women, primarily as widows. BlackRock

The Rise of the SHEconomy

Women are increasingly directing their wealth towards impact investing, sustainable ventures, and philanthropic causes, reflecting a desire to align investments with personal values. CAIA Right now, women have an increasing economic influence and there is a critical gap in how women investors are served. There is a gap in female financial advisors to serve women investors. Currently, only 15-20% of financial advisor remain to be female and fewer specialize in diversified portfolios to not only include stocks, bonds, mutual funds and etfs in the public market but less specialize in alternative investments. With the democratization of alternative investments, there is an opportunity for female investors to diversify their portfolios not only in the public markets.

The Obstacles the Women Still Face with Investing

Lack of Financial Confidence

Only 25% of affluent women feel comfortable making investment decisions independently, highlighting a confidence gap that may hinder proactive wealth management. McKinsey & Company

Underrepresentation in Financial Advisory

Despite controlling a significant portion of wealth, women are underrepresented in financial advisory roles, with only 15-20% of advisors being female. CAIA

Communication Barriers

Traditional financial advisory approaches often fail to address women’s unique needs and preferences, leading to dissatisfaction and potential disengagement. Women often prefer different communication styles than those offered by male advisors; focusing on life goals and generational education for their families. Thinking about the book, Men are from Mars, Women are from Venus by John Gary. The books states there are fundamental psychological differences between men and women.

The Role of OpalWomen at Opal Wealth Advisors

Specializing in Financial Planning for Women

OpalWomen was created to assist women in developing comprehensive financial plans that align with their values, goals, and life circumstances, ensuring a holistic approach to wealth management. We believe that intergenerational wealth planning is part of the planning process.

Education and Empowerment

OpalWomen plays a crucial role in educating women about financial concepts, investment strategies, and risk management, empowering them to make informed decisions. Though in person and online education, we seek to educate and empower clients.

Facilitating Intergenerational Wealth Transfer

OpalWomen can guide women in structuring their estates and facilitating open family discussions to ensure a smooth and intentional transfer of wealth to future generations. World Economic Forum

Conclusion

The Great Wealth Transfer presents a pivotal opportunity for women to assert greater control over financial assets and influence economic trends. By recognizing potential obstacles and leveraging the expertise of financial advisors, women can navigate this transition effectively, ensuring their wealth serves their personal goals and leaves a lasting legacy. The financial services industry has not always done a great job of addressing the needs that women face economically. In addition, the industry has continued to use jargon and complication.

OpalWomen simplifies financial planning, goal setting and generational wealth planning by working alongside our female clients to align their financial plan with their values and goals that extend beyond traditional investment management.

For further reading and resources on this topic, consider the following:

Financial Freedom for Women: A Comprehensive Planning Guide
A Woman’s Guide To Financial Planning: The Seven Essential Ingredients
How to Give Financial Advice to Women: Attracting and Retaining High-Net-Worth Female Clients
Shortchanged: Why Women Have Less Wealth and What Can Be Done about It

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Opal Wealth Advisors, LLC [“OWA]), or any non-investment related content, made reference to directly or indirectly in this commentary will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this commentary serves as the receipt of, or as a substitute for, personalized investment advice from OWA. OWA is neither a law firm, nor a certified public accounting firm, and no portion of the commentary content should be construed as legal or accounting advice. A copy of the OWA’s current written disclosure Brochure discussing our advisory services and fees continues to remain available upon request or at www.opalwealthadvisors.com. Please Remember: If you are a OWA client, please contact OWA, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. Unless, and until, you notify us, in writing, to the contrary, we shall continue to provide services as we do currently. Please Also Remember to advise us if you have not been receiving account statements (at least quarterly) from the account custodian.