Women Investors on the Rise

by | May 20, 2019 | Newsletters

While perusing various financial websites, and social media platforms like LinkedIn and Facebook, I’ve noticed that the topic of women and their approach to financial matters comes up more frequently these days. Recent data has caused me to take a step back and look at the topic in a whole new way. According to a 2015 report by the BMO Wealth Institute, women in the U.S. controlled at least $14 trillion of U.S. household finances, representing 51% of all personal wealth in the U.S. By 2020, women are projected to control $22 trillion.[1] Globally, as of 2018, women account for an estimated 40% of all wealth.[2]

As you can see, these numbers keep growing. But why? Several factors are at play here and they highlight the successes women have had and how far we have come over the last 60 years. According to a study by Prudential, in 1960 women were the breadwinners in only about 11% of U.S. households. Today, that number has grown to 44%.[3] We are also seeing more female business owners and entrepreneurs. In fact, 4 out of every 10 businesses in the U.S. are owned by women.[4]  Other, more circumstantial factors that contribute to women’s control of a larger portion of personal wealth include the divorce rate, which continues to hover around 50% of all marriages, and the fact that women tend to outlive men and, therefore, will eventually be the financial decision maker in their household.

Women’s growing economic power is a good thing. However, as they say, with great power comes great responsibility. One potential issue is the fact that, according to the Prudential study, only 20% of women feel “very well prepared” to make wise financial decisions. Further, while a high percentage of women profess an understanding of basic financial products like savings accounts and health insurance, that percentage drops significantly when discussing more complex financial products like 401(k) plans, mutual funds, and annuities. Ladies, if we are in control of a substantial amount of the dough, we must know how to roll it, pat it, and bake it! You can wake up one day and your entire life can change, how awesome would it be to not have to worry about your finances, because you are well prepared in that area, so you can focus on whatever else life is throwing at you. There are a lot of charlatans out there who would love to take advantage of someone in such a situation in order to gain control of their money, be smart and be prepared so that it does not happen to you.

Let’s work together to bridge the financial knowledge gap. What I have found over the course of my career is that education helps me gain the trust of my clients because education is empowerment. I aim to teach my clients to fish, not just give them one. Educating both men and women on financial matters and including both partners in financial planning and decision making is the key to a successful financial partnership. Work with a financial advisor or advisory firm that supports a woman’s role in the process and encourages the involvement of both partners. It is also important to work with a financial advisor who can relate to both parties and who has the patience to answer all questions, simple or complex, with no judgement. At Spotlight Asset Group, we give our advisors the tools and resources necessary to educate our clients, like this blog, our podcast series, and our educational seminars that are aimed at both women and men. I am so proud to work at Spotlight Asset Group because I feel that it is a place where I can make a positive change and build the bridges necessary to close the financial knowledge gap.

[1]  BMO Report: Despite Controlling $14 Trillion in Wealth, American Women Still Have Challenges to Overcome, available at https://newsroom.bmo.com/2015-04-02-BMO-Report-Despite-Controlling-14-Trillion-in-Wealth-American-Women-Still-Have-Challenges-to-Overcome (April 2, 1025).

[2]  Global Wealth Report 2018, Credit Suisse Research Institute, available at https://www.credit-suisse.com/corporate/en/research/research-institute/global-wealth-report.html (October 2018).

[3] Financial Experience & Behaviors Among Women, Prudential Financial Inc., available at http://corporate.prudential.com/media/managed/wm/media/Pru_Women_Study_2014.pdf (June 2014).

[4] WBENC Celebrates National Women’s Small Business Month, The Women’s Business Enterprise National Council, available at https://www.wbenc.org/blog-posts/2018/10/1/wbenc-celebrates-national-womens-small-business-month (October 1, 2018).

Kristin Sweis

Join the Spotlight Asset Group Newsletter

Women Investors on the Rise

by | May 20, 2019 | Newsletters

While perusing various financial websites, and social media platforms like LinkedIn and Facebook, I’ve noticed that the topic of women and their approach to financial matters comes up more frequently these days. Recent data has caused me to take a step back and look at the topic in a whole new way. According to a 2015 report by the BMO Wealth Institute, women in the U.S. controlled at least $14 trillion of U.S. household finances, representing 51% of all personal wealth in the U.S. By 2020, women are projected to control $22 trillion.[1] Globally, as of 2018, women account for an estimated 40% of all wealth.[2]

As you can see, these numbers keep growing. But why? Several factors are at play here and they highlight the successes women have had and how far we have come over the last 60 years. According to a study by Prudential, in 1960 women were the breadwinners in only about 11% of U.S. households. Today, that number has grown to 44%.[3] We are also seeing more female business owners and entrepreneurs. In fact, 4 out of every 10 businesses in the U.S. are owned by women.[4]  Other, more circumstantial factors that contribute to women’s control of a larger portion of personal wealth include the divorce rate, which continues to hover around 50% of all marriages, and the fact that women tend to outlive men and, therefore, will eventually be the financial decision maker in their household.

Women’s growing economic power is a good thing. However, as they say, with great power comes great responsibility. One potential issue is the fact that, according to the Prudential study, only 20% of women feel “very well prepared” to make wise financial decisions. Further, while a high percentage of women profess an understanding of basic financial products like savings accounts and health insurance, that percentage drops significantly when discussing more complex financial products like 401(k) plans, mutual funds, and annuities. Ladies, if we are in control of a substantial amount of the dough, we must know how to roll it, pat it, and bake it! You can wake up one day and your entire life can change, how awesome would it be to not have to worry about your finances, because you are well prepared in that area, so you can focus on whatever else life is throwing at you. There are a lot of charlatans out there who would love to take advantage of someone in such a situation in order to gain control of their money, be smart and be prepared so that it does not happen to you.

Let’s work together to bridge the financial knowledge gap. What I have found over the course of my career is that education helps me gain the trust of my clients because education is empowerment. I aim to teach my clients to fish, not just give them one. Educating both men and women on financial matters and including both partners in financial planning and decision making is the key to a successful financial partnership. Work with a financial advisor or advisory firm that supports a woman’s role in the process and encourages the involvement of both partners. It is also important to work with a financial advisor who can relate to both parties and who has the patience to answer all questions, simple or complex, with no judgement. At Spotlight Asset Group, we give our advisors the tools and resources necessary to educate our clients, like this blog, our podcast series, and our educational seminars that are aimed at both women and men. I am so proud to work at Spotlight Asset Group because I feel that it is a place where I can make a positive change and build the bridges necessary to close the financial knowledge gap.

[1]  BMO Report: Despite Controlling $14 Trillion in Wealth, American Women Still Have Challenges to Overcome, available at https://newsroom.bmo.com/2015-04-02-BMO-Report-Despite-Controlling-14-Trillion-in-Wealth-American-Women-Still-Have-Challenges-to-Overcome (April 2, 1025).

[2]  Global Wealth Report 2018, Credit Suisse Research Institute, available at https://www.credit-suisse.com/corporate/en/research/research-institute/global-wealth-report.html (October 2018).

[3] Financial Experience & Behaviors Among Women, Prudential Financial Inc., available at http://corporate.prudential.com/media/managed/wm/media/Pru_Women_Study_2014.pdf (June 2014).

[4] WBENC Celebrates National Women’s Small Business Month, The Women’s Business Enterprise National Council, available at https://www.wbenc.org/blog-posts/2018/10/1/wbenc-celebrates-national-womens-small-business-month (October 1, 2018).