The world of wealth is experiencing a significant shift as more women take control of financial assets. This trend, often referred to as the “feminization of wealth,” represents a powerful movement in the financial sector. As women increasingly outlive men, inherit wealth, and take charge of financial decisions, their role in managing and growing wealth is expanding at an unprecedented rate. The question now is how women approach these responsibilities, what challenges they face, and how we can reshape the financial narrative to support them.

A Boston Consulting Group (BCG) report reveals that women now control 32% of the world’s wealth, amounting to $72 trillion. This figure is expected to rise by 7% annually, outpacing global wealth growth. With women, on average, living five to six years longer than men, they often find themselves in control of significant financial assets after the death of a spouse or in widowhood. However, this transition is not without its difficulties.

Financial Surprises: The Need for Better Planning

While the accumulation of wealth may seem like an advantage, many women are unprepared for the responsibilities that come with it. A study by UBS found that 74% of widows and divorcees experienced negative financial surprises after assuming control of their finances. This revelation highlights a gap in financial education and preparedness, particularly for women who were not the primary financial decision-makers in their marriages. The study underscores the importance of early and comprehensive financial planning for women to ensure long-term security.

A related study from Wells Fargo and The Female Quotient found that 74% of women believe financial health is essential to living their best lives, yet only 51% feel confident in managing their finances. This disparity between the importance placed on financial well-being and the confidence in handling it is a clear indicator that the financial industry needs to do more to support women in building financial literacy and independence.

Dispelling Myths About Women Investors

One of the most persistent myths surrounding women and wealth is the idea that they are less capable investors than men. This stereotype, while outdated, continues to influence perceptions of women’s financial abilities. The reality, however, tells a different story. Women often approach investing with a mindset that focuses on long-term stability and risk awareness, rather than immediate, high-risk returns.

Sallie Krawcheck, co-founder and CEO of Ellevest, a digital financial advisor tailored for women, has long been a vocal advocate for changing the narrative around women and investing. Krawcheck emphasizes that “women are not risk-averse; we are risk-aware.” This approach means that women are more likely to prioritize financial security and sustainability over speculative gains. Studies show that women who invest tend to outperform men, largely because they trade less frequently and avoid risky investment bubbles.

Despite these facts, the financial industry has been slow to adapt to women’s unique needs. Women often report feeling overlooked or underestimated by financial advisors. In fact, studies reveal that many women, particularly widows and divorcees, fire their financial advisors after taking full control of their wealth. This disconnect between women and their advisors points to a broader issue of representation and understanding in the financial sector.

Addressing the Confidence Gap

The perception that women are less confident in their financial abilities is another hurdle that needs to be addressed. A 2022 study by Fidelity Investments found that women who invest achieve returns comparable to, or even better than, their male counterparts. Yet, only 29% of women view themselves as investors, compared to 51% of men. This “confidence gap” is one of the primary challenges facing women in wealth management.

To bridge this gap, the financial industry must offer more tailored education and resources. Programs like Ellevest, which focus on women’s financial empowerment, are critical in providing the guidance and tools needed for women to invest confidently. By offering education, mentorship, and customized investment strategies, these programs help women take charge of their financial futures with confidence.

Redefining Wealth for the Future

The feminization of wealth is not just a demographic shift—it’s an opportunity to redefine the way wealth is managed and invested. As more women assume control of financial assets, the financial industry must evolve to meet their needs. This means breaking down outdated stereotypes, addressing the confidence gap, and providing women with the resources they need to manage and grow their wealth effectively.

Women’s growing financial power offers a unique opportunity for the future of wealth management. With the right support and education, women can not only maintain but also expand their financial legacies. This shift will have a profound impact on future generations, as more women become the stewards of wealth for their families and communities.

In conclusion, the future of wealth is increasingly female, and the financial sector must adapt to this reality. By embracing women’s approach to investing, offering better financial education, and addressing the unique challenges they face, we can ensure that the feminization of wealth leads to a more equitable and prosperous financial future for everyone.