The Purse

Women and their changing relationship with money. And listen to the podcast interview with Professor Dame Heather McGregor

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Women and their changing relationship with money. And listen to the podcast interview with Professor Dame Heather McGregor

By 2030, American women are expected to control much of the $30 trillion in financial assets that baby boomers will possess.

Jana Hlistova

Dec 17, 2023

Transcript

Welcome to our #216 weekly newsletter.

“For women taking control of their financial future”

-Jana Hlistova

From The Purse

In this week’s newsletter, we spotlight the changing relationship women have with money in the 2020s.

And don’t forget to The Purse Podcast interview with Professor Dame Heather McGregor. We talk about COP28, climate finance and why investing in climate change is also investing in gender equality. Please enjoy!

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You can review the news in brief so you stay on top of global financial, economic and investing trends.

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And The Purse will be back in early 2024! Thank you for being on this journey with us. We wish you all ‘Happy Holidays’ and a very Happy New Year.

See you next year!

Jana

Women and their changing relationship with money

By 2030, American women are expected to control much of the $30 trillion in financial assets that baby boomers will possess.

Significant sums of money is due to change hands this decade, as women stand to inherit wealth, in large part, from their spouse, as reported by Yahoo Finance.

According to research by McKinsey:

By 2030, American women are expected to control much of the $30 trillion in financial assets that baby boomers will possess — a potential wealth transfer of such magnitude that it approaches the annual GDP of the United States.

Younger women are becoming financially savvy

However, another demographic shift is that younger women are putting themselves in a financially strong position.

They are engaging far more with their money and starting to invest using investment platforms or mobile apps. In fact, there was a surge in the number of women who started investing during the pandemic.

For example, Fidelity investments recently added 48% more new women customers in 2023 compared to 2019. And the good news is that today, an average of 60% of women invest in the stock market.

This is how it breaks down across each generation (ie women who invest):

71% of Gen Z
63% of millennial
55% of Gen X
57% of Baby boomers.

However, there is still an enormous financial gender gap.

A recent Varo Bank survey found that women are significantly more likely than men to be living pay cheque to pay cheque, (59% of women vs 41% of men). In addition, 67% of women said they consider themselves financially fragile, according to the survey.

Changes in the financial services industry

As a consequence of this ‘wealth shift’, financial advisers are having to adapt to meet the needs and preferences of female clients.

The data shows that when a woman’s spouse dies, they move on from their existing financial adviser within the year.

As reported by Yahoo Finance, some experts suggest that the upcoming transfer of wealth needs to be tempered by an understanding of wealth disparities and healthcare costs.

As people live longer, and women in particular outlive men by 5-7 years (on average), the concern is that a significant portion of this wealth will be consumed by healthcare costs.

What next? (Re) Listen to The Purse Podcast: