Women’s wealth is growing, and wealth managers are adjusting

One of the sea changes in the American economy during this decade is the growing share of financial assets held by women. They’re earning more in their work lives, and they’re inheriting more in their family lives. And as the “great wealth transfer” gains steam, innumerable women’s accounts will benefit.

But females tend to spend, invest and donate their money in different ways from their male counterparts. Seeing it as an opportunity, the wealth management industry is adjusting to the larger presence of women in its client base, as well as their preferences.

Claire Ballentine, a reporter for Bloomberg, recently spoke with “Marketplace” host Kristin Schwab about how women’s wealth gains are changing a male-dominated industry. An edited transcript of their conversation follows.

Kristin Schwab: So, what’s behind the expectation that women will increasingly hold a larger share of American wealth?

Claire Ballentine: A couple of factors going on here. As we know, women are working more now than ever before, and they’re making more money. The wage gap is still there, and it’s closing, but one of the really big factors is this demographic trend. The baby boomer generation in the U.S. and around the world has a large chunk of wealth right now, and women typically outlive men by five years on average. So, there’s this transfer of wealth, not just from one generation to the next, but [intragenerationally], from men to women.

Schwab: You write in your story about how women coming into wealth affects many different industries because women spend money differently or have different attitudes towards it. Can you start off by talking about how that works with investments?

Ballentine: So, we’re seeing their gender differences in investing. Obviously, these are very high-level. Each person has their own opinions on how they’re going to invest, but we definitely see women are a bit more conservative in their investments. Women work really hard to make money and save it, but they’re sort of hesitant to risk it. In investing, there’s a balance there. You want to take a certain amount of risk, but at the same time, you don’t want it to be too risky and put it all in crypto or something like that. But we are seeing women reporting that they’re having more stock holdings. So, Fidelity does this great study, and they found that in the 2024 study, 71% of women had stock holdings. So that’s up from only 44% in 2018, which is pretty massive.

Schwab: One thing I thought was really interesting was women’s attitudes in philanthropy. Can you talk about how that industry is sort of taking on the change of how women donate money?

Ballentine: That’s what I think is one of the most exciting aspects of this trend, and one of the real-world effects of it is that women, across all income levels and all generations, are more likely to donate money to charity than their male counterparts. So, there’s a lot of research that’s done on the motivations for why different people give. One study has shown that women tend to give based on empathy. It varies also based on how old the women are. Millennial women care about causes like social justice and climate change, while older women skew more towards religious organizations or those focused on reducing poverty. But across the board, women in general are more inclined to give to charity than men.

Schwab: Well, I’d imagine that these changes might shape these two industries a bit, investing and philanthropy. How are these industries preparing?

Ballentine: So it’s set to be a big change. Just seeing more women having more money and more power, coming to the table, especially when you look at how the wealth management industry is going to have to adapt to it. So, a big focus is hiring more women. The wealth management industry is very traditionally male, so they’re stepping up efforts, and there’s also been studies done that show women really want a relationship with their financial advisers. They don’t want someone just to come in and tell them what to do. They want to have a conversation. Think about their life goals, their values and sort of how investing can align with that.

Schwab: How much do you think this helps close the wealth gap, and what work is there left to do?

Ballentine: I think this is obviously a really huge positive trend. It’s putting more money in the hands of women. The stat from McKinsey & Co. is that women will control $34 trillion by 2030, which is close to double last year’s total. So that’s huge. It’s more money in the hands of women. And that’s a great thing. Where there’s more work to be done is that there’s still only 12% of C-suite positions in the U.S. are occupied by women. Only 41 out of all the CEOs at S&P 500 companies are women. So it’s a positive sign and a really great trend, but it really does highlight that there’s more work to be done.