A new report ahead of International Women's Day by the wealth management firm reveals key facts about women's wealth globally and invites wealth managers to reimagine wealth advice for women.

Women’s wealth is growing fast globally presenting a “huge” business opportunity for wealth managers, according to UBS Global Wealth Management.

With the growing trend of women wanting to take control of their finances, wealth managers need to target their offering very carefully, the report found. In a 2022 survey by BNY, it calculated that if women invested at the same rate as men, there could be more than $3.22 trillion of additional capital to invest globally.

Women’s global wealth
By 2030, women in the US are expected to control much of the $30 trillion in financial assets that Baby Boomers will possess, the UBS Women and Investing – reimagining wealth advice report found. In 2020, female investors controlled 33 per cent of total global personal investable wealth, up from 31 per cent in 2016, and are projected to increase this share to 35 per cent by 2025.

Between 2016 and 2020, growth in women’s investable wealth outpaced men’s between 2016 and 2020 (CAGR of 8.2 per cent versus 5.9 per cent), while women’s investable wealth is expected to continue to grow more rapidly than men’s between 2021 and 2025 (projected CAGR of 6.0 per cent versus 4.2 per cent). Women’s share of regional wealth is highest in North America, but growing fastest in Asia, UBS said.

Lower satisfaction with existing wealth advice
Based on EY research, 67 per cent of female investors globally stated that their wealth managers misunderstood their goals, with 70 per cent of women switching their wealth relationship to a new financial institution within a year of their spouse’s death.

The UBS report also highlights a survey by PIMCO suggesting that 72 per cent of women, and 81 per cent of Millennial women, find the investment system confusing, attributing this to the use of jargon and receiving unsuitable advice.

In light of these figures, wealth managers should consider the clear benefits of gender equality for society, the report noted.

Women want control
Since 2017, UBS has seen an increase in the number of women who want control over their finances. 

Based on research from Fidelity in 2021, the number of women in the US more interested in investing has risen by 50 per cent since the start of the pandemic. The survey also found that 67 per cent of women are now investing outside their retirement plans, compared with 44 per cent in 2018, with young women taking more action.

Seventy-one per cent of Millennial women versus 62 per cent of Baby Boomers are investing outside their retirement plan. A 2021 Nutmeg survey, where one in five women said they felt more confident dealing with money matters in light of the pandemic, confirmed these findings.

Gap between intention and action
Investor Pulse survey in 2021 showed that while 68 per cent of women had started talking more about finances within their families, only a fraction of these followed through with their intended actions. While 40 per cent of women intended to act, only 12 per cent did so, leaving a gap of 28 per cent between intention and action. Similarly, while 34 per cent of women intended to discuss portfolio impact with an advisor, only nine per cent actually did so, leaving a gap of 25 per cent. Out of 37 per cent who intended to review their will and estate plan, only 11 per cent did so; while only 11 per cent of the 36 per cent who intended to update their long-term care plan did so.
 

Wealth management value proposition for women
The report suggests that UBS's wealth way approach, which helps investors develop an investment strategy optimised for their goals and objectives, provides a good framework; it allows women to define investment strategies, clearly understand where their money is and why, and to invest with confidence.

It recommends three strategies, including a liquidity strategy to meet a family’s short-term cash flow needs over three to five years.

Secondly, a longevity strategy, covering five to 10 years, which focuses on helping investors meet their goals over their lifetimes.

Finally, remaining wealth can be invested in a legacy strategy, aimed at generational wealth transfer and a positive impact on society, goals which are particularly important for women, UBS said.

A sustainable and impact offering is also advised.

Women should have a trusted advisor at pivotal times in their lives such as divorce or widowhood to provide holistic advice, reflecting the entire financial situation including wealth planning, estate planning, and life insurance.

“In a world where gender gaps persist, women can mitigate these challenges with a sound investment approach. Finding the right investment approach can make a difference in improving the financial wellbeing as well as the quality of women’s lives," Marianna Mamou, head of Advice Beyond Investing at UBS Global Wealth Management chief investment office, said. 

“The report is spot on. Women really do want to engage. We see that in the fact that we have helped thousands of women in the last couple of years with their money. We get most of our interactions through Instagram and Facebook from women trying to get advice. We need to think about the jargon. Speaking to women in a non-jargon language builds trust,” Lisa Conway-Hughes, co-founder of the Ladies Finance Club UK, told WealthBriefing.