From Assets to Values to Family Dynamics: Why UHNW Women Are Changing the Conversation Around Wealth

The growing number of women involved in managing their families’ fortunes is changing the face of wealth advisory for the better. Above all, to meet evolving expectations, we need to talk about so much more than money.

There has been a flood of media coverage about the “great wealth transfer” that will shift financial assets between generations over the next 20 years – estimated at $84 trillion in the US alone¹ – and the impact that will have on wealth management. But a big sub-theme of that trend is the transfer of assets to women. A reasonable estimate is that by 2030, American women will control $30 trillion in assets, a figure that is equivalent to the GDP of the US.²

This has already begun to influence how wealth is managed. Earlier in my career, I more often dealt with men; now, women are increasingly involved. Families are involving their children, regardless of gender, at earlier stages. I’m also speaking with more women directly about managing their assets, as both inheritors and wealth creators.

We are seeing more decisions made as a family rather than by an individual. This can lead to complications when planning goes from a nuclear family, to the children having spouses and children of their own, and onwards to what is often referred to as the “cousin consortium”. It becomes even more complicated when dealing with family members in different locations around the world, who have varying interests in the family business or wealth management.

The decision-making process has also changed, because more UHNW clients want to invest in assets and projects that align with their family values – what they believe is good for their

community and for the world at large. Climate is a big focus, as are social issues. Inequality is particularly important to many of the women I have worked with, whether it is because of their own story, or because they want to improve the situation for the next generation.

Broader Concerns, More Questions

All this means the role of the wealth advisor is constantly evolving to meet the needs of a changing client base – resulting in some truly positive outcomes with benefits for all. With the involvement of new family members, alongside more female entrepreneurs, advisors are required to appreciate their learning style and design future discussions to meet them where they are at. This means asking a lot of questions along the way, to appreciate what they understand, what is helpful, and what resonates with them.

Furthermore, just as we need to ask many more questions to ensure that all family members are involved and accommodated, we are receiving many more questions as well. Particularly when there is a family business, more questions arise around family governance.

Who is going to take over when the founder or successor to the founder is no longer there? How do we prepare them? What do you have to do to work in the family business? These are not new questions, so that demonstrates why advisors need to dedicate more time to painting a picture of the future and helping families prepare. While some advisors might feel that regular family-governance meetings are overkill, I believe they are necessary to pave the way and set an example for the next generation.

We also hear more clients asking not only how they make more money for the future, but how they can steward it and align their investments to their purpose. In other words: How do we make decisions that are good, not just for our family but for our community and the causes we believe in? When you are evaluating potential investments on more than just returns, this is a different world of investing than people may be familiar with, so additional education is necessary.

• Case Study 1
  
  I recently began working with a woman in her early 30s, after she learned about a trust vehicle that allows her to start managing some money on her own, and about the money she will later inherit. Her first question was: “What is this all for? What does my family expect me to do with all of this?” Her parents said: “Let’s talk about what is important to us and to you, and decide that together.” She has a lot of priorities based on her values for the environment, and she wants to invest in a way that supports those values rather than just looking for the best return. So now it’s my job to come alongside her, support the discovery process, and help her navigate her options.

Less About Money, More About Family

As a growing number of women are involved in managing family wealth, the industry is adapting to better meet their needs. But I also see a tendency to try to pigeonhole them, to believe they are all different in a single way, or that they only want one thing. However, I think they want it all – financial advice, education, insights, investment returns – but they want it delivered differently, integrated in a way that it has not always existed in our industry.

My conversations with UHNW women are often different because they tend to think differently about wealth. It would be incorrect to say that women do not want to talk about financial markets, but beating the market is frequently not their primary interest. Their focus is often on how wealth will impact and benefit their family. They are thinking not only about themselves and what they want their money to do for them, but, for example, ahead to what their children are going to need and how to provide the support missing in their own experiences.

That has meant my role as an advisor has changed to be part coach, rather than purely offering advice and analysis. I help, encourage, and direct them to explore and shape what is right for them and for their family based on their values. And I use the benefit of my experience of working with other families to inform that. After 20 years in wealth management, I can say: Here are some ways we have seen other families do this and here is how it worked for them. Women are generally interested in that perspective, more about the family, the governance, and the dynamics.

• Case Study 2
  
  I am advising a woman in her mid-50s, who knew about the money her family has but did not really understand what it means for her life, her retirement, and her children. So step one was simplifying the complexity and guiding her through a process of considering options in a way that made sense for her and her situation. The conversations are less about dollars than what she wants her life to look like, what her plans are with her husband, where she thinks her children are going to land as they finish college – and then we start to incorporate the money into those discussions.

Working Hard for the Next Generation

In our experience, conversations today are beginning so much more broadly, with a process of learning about what is important to the family before we start talking about how to align portfolio goals. This type of discovery needs to happen every time a new family member is involved, particularly the next generation.

Moreover, as we look at the great wealth transfer – and the growing role that women are playing in that – advisors must strive to keep adapting to our clients’ evolving needs.

A key area is holistic service. Above all, we must tailor how we work with our clients based on their values, needs and goals, to help them build a team to support all aspects of their family.

Curiosity is also essential. Undertaking a process of in-depth discovery with each family member means continually asking questions and not making assumptions about what is important to them simply because you have worked with their parents (or grandparents!) for many years.

And all this must be underpinned by continuous learning. Having a deep understanding of family dynamics, industry trends, and investment opportunities means both spending the time and maintaining an open mindset that is evolving as we learn.