Financial Planning

The Changing Role of Women in Managing Family Wealth

Woman working on her computer at home

For decades, a steady shift in financial and economic power has been underway. Today, more than half of all personal wealth in the U.S. is controlled by women.1 It’s an unprecedented financial empowerment that is only expected to strengthen with Gen X and millennial women anticipated to inherit 70 percent of the $41 billion wealth transfer from their Baby Boomer parents.2

Women today are more educated, engaged and independent than ever before. They earn 60 percent of all undergraduate and advanced degrees, and nearly half (44 percent) have become their family’s primary breadwinner.3 As a result of this emerging financial empowerment, fewer and fewer are willing to sit back and accept a passive role in the management of their family’s growing wealth.

A different approach to financial planning

Women tend to build financial plans around specific life goals for themselves and their families instead of focusing predominantly on investment performance. They’re much more inclined to view money as a means to an end (protecting and caring for their family and living fully) rather than as a scorecard of personal success. As such, women generally assign far greater significance to long-term goals such as retirement, education, and legacy planning.4

From an investment perspective, women are often considerably more risk aware and therefore better diversified in their portfolios than men. They typically place a higher premium on asset protection and preservation in hopes of not outliving their retirement savings.5 This can lead women to pay closer attention to life and long-term care insurance planning as well as to exploring guaranteed lifetime income solutions.

These important behavioral tendencies—patience, a long-term, goals-based perspective, and risk-aware diversification—comprise the essential foundational elements of any successful investor. And women seem to possess a clear gender advantage.

Making a positive impact on others

Whether through a socially responsible investment strategy or philanthropy, more and more women are using their wealth as a means to engage with others in impactful, life-changing ways, and as a teaching moment for the next generation to help them become more aware, empathetic and compassionate people. If this is an area of interest, your advisor can help you explore strategies designed to balance your need for return with your desire to make the world a better place.

Addressing retirement realities

Women don’t just think differently about wealth and retirement; they also face a very different retirement reality. Women’s incomes continue to lag those of men for a variety of reasons, such as the gender pay gap, as well as critical earning years lost to child-rearing and caregiving; yet greater longevity means you’ll need to save even more for retirement than men.

Longevity also brings with it higher lifetime healthcare expenses, as well as an increased probability of needing some sort of long-term care. In fact, a woman retiring today can expect lifetime insurance premiums and out-of-pocket medical expenses in excess of $350,000, not including the cost of any long-term care.1

The need to take the initiative, get more actively involved in financial planning and make sound, wise investment decisions has never been more important.

The search for “collaborative control”

Today, women want to be in control of their families, their careers AND their wealth. Unlike men, who are more inclined to jump head-first into trying to do everything by themselves, women tend to seek out the opinions, insights and expertise of others—educating themselves on a subject before ultimately deciding on a particular course of action.

This tendency towards collaboration is one of the reasons why SunTrust strives to attract the best and brightest female wealth advisors from across the industry. Because they’re walking in your shoes—balancing career, family and health—our women advisors have a keen understanding of your hopes, concerns and unique challenges.

Regardless of whether you’re just starting your wealth journey or taking over the financial reins due to divorce or the death of a loved one, there are certain qualities in an advisor you should seek out. Make sure he or she is far more focused on talking about planning rather than investment products. Look for a strong commitment to ongoing dialogue and frequent communication. Perhaps most importantly, find an advisor who values and embraces a team approach to wealth management instead of someone who works as a lone wolf.

Start putting your plan in place 

The SunTrust Private Wealth Management team can work with you to develop a financial plan.

1 HealthView Services, 2017 Retirement Health Care Costs Data Report (expected insurance premiums and out-of-pocket healthcare costs for a healthy 63-year-old woman retiring in 2017 and living to age 89)

2 Boston College’s Center on Wealth and Philanthropy

3 The Women’s Leadership Gap, Center for American Progress 2015

4 Fidelity Investments, "Women and Money" Survey, May 2017

5 Women and Money" Survey, May 2017

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