The Future of Wealth is Female: Why Advisers Must Act Now
The wealth landscape in the UK is undergoing a profound shift. By 2025, women are expected to control 60% of the nation’s wealth, driven largely by inheritance from spouses and the longer life expectancy of women. This trend, often termed the “Great Wealth Transfer,” presents both challenges and opportunities for financial advisers.
Yet, many women remain underprepared for managing wealth, highlighting a critical need for financial advisers to engage with this demographic more effectively.
The Issues: Financial Confidence and Preparedness
While women are set to become the primary stewards of a significant portion of UK wealth, several issues impede their financial confidence and preparedness:
Lack of Financial Advice: Despite the looming wealth transfer, only 12% of women have discussed generational wealth transfer with a financial adviser. This is alarming given that 54% believe professional guidance would ease the process of managing and protecting this wealth.
The Gender Pay Gap and Career Breaks: Women face numerous financial challenges, including the gender pay gap and career breaks for caregiving. These factors contribute to lower lifetime earnings and smaller pension pots, making financial advice even more crucial to ensure long-term financial security.
Inheritance Complexity: Women often outlive their spouses, inheriting their wealth, but may feel unprepared to manage these assets effectively. The lack of preparation and advice can lead to suboptimal decisions, often resulting in the payment of significantly more IHT than necessary, threatening the longevity and security of their and their family’s finances.
The Opportunity for Financial Advisers
Given these challenges, financial advisers have a unique opportunity to engage with women, helping them navigate the complexities of wealth management and inheritance. Here’s how and why they should focus on this growing demographic:
- Tailored Financial Planning: Financial advisers can provide personalised advice that addresses the unique financial journeys of women. This includes strategies for managing inherited wealth, optimising tax efficiency, and ensuring that long-term financial goals are met.
- Building Trust Through Education: Women tend to prioritise financial security and quality of life, making them more conservative investors. Advisers who focus on educating women about their financial options, risks, and opportunities can build trust and long-term relationships. This is particularly important as many women feel uncertain about managing large sums of inherited wealth. This is highlighted by the fact that 90% of inherited portfolios are withdrawn from the original fund manager on the death of their client” and women are even more likely than men to opt for perceived safe bets like property rather than keeping investments in equities.
- Protecting Funds Under Management: Engaging with women is not just about offering advice; it’s about ensuring that the wealth they inherit remains under professional management. Advisers who fail to connect with female clients risk losing these assets as women may turn to other sources of advice or attempt to manage finances on their own.
Conclusion
The future of wealth is increasingly female, and financial advisers must recognise the unique needs and challenges women face as they inherit and manage significant assets. By providing tailored advice, focusing on education, and building trust, advisers can ensure that they not only protect their funds under management but also empower women to achieve financial security and independence. As the “Great Wealth Transfer” unfolds, the advisers who adapt to this shift will be best positioned to succeed in a changing financial landscape.
Find out more about Estgro
Estgro is the leading platform for generational wealth planning, equipping advisers with the tools to craft comprehensive strategies that protect and sustain family wealth across generations.
Connect with us today to see how Estgro can help strengthen your role as the trusted family adviser by deepening relationships with your clients’ spouses and children, ensuring their wealth is expertly managed and your assets under management remain protected.