Preparing for the Great Wealth Transfer to Women

According to the U.S. Census Bureau, the Baby Boomer generation will have reached the traditional retirement age of 65 by 2030. At this point, the drastic shifts of those coming into and managing wealth, which industry experts refer to as the “Great Wealth Transfer,” will be rapidly ascending toward its peak. Who benefits the most? Millennials, of course, but also women.

A Woman’s World

Research by McKinsey^[1] found that in the United States more than two-thirds of wealth will be held by women by 2030. This reality brings some urgency to addressing the unique challenges women face when it comes to investing and managing wealth.

“Women’s financial goals aren’t all that different from men’s; whether they are focused on funding a retirement, paying for a child's education or caring for loved ones, their goals are fairly universal,” said Carole Brown, Head of Asset Management Group at PNC.

It is the way in which women approach these goals and talk about them that can vary significantly.

Recognizing these important differences in approaches often inform how women approach savings and investment strategies, engage in financial decision-making and play a role in how they view wealth, PNC Private Bank^® applies a gender-specific lens to wealth planning and investing. This approach takes into consideration barriers that might prevent women from optimizing opportunities to build and preserve wealth.

“When PNC published a Millennials and Investing survey a few years ago, a finding I found striking was that female Millennials were more inclined to build wealth through saving than investing, while male Millennials were more comfortable with taking financial risks,” said Brown. “To help address these types of gaps, my team and I work with female clients to encourage them to talk about their goals, ask questions and gain confidence in their financial decisions.”

Gender Lens Investing

Women and Millennials have also begun to express a heightened interest in responsible investing in recent years. This goals-based investment approach aligns an investor’s portfolio with their personal values. As such, responsible investing excludes portfolio exposures that may conflict with the investor’s values and allocates targeted capital toward their objectives. The economic and social effects of COVID-19, the racial justice movement and climate change have accelerated the interest and implementation of responsible investing.

“The rise in responsible investing strategies may also propel women’s economic empowerment,” said Brown.

While women have made notable gains in terms of wealth and financial equality, there is still an economic gender gap that many women and men are passionate about closing.

Individuals and institutions specifically looking to use their investment capital to positively affect the lives of women and girls can take a similar approach that deliberately incorporates gender factors into investment analysis and decisions. We call this gender lens investing.

Gender lens investing takes many forms, including investing in companies, funds and other investment vehicles that consider gender in some way. Investors have demonstrated particular interest in accounting for women in leadership positions, actively engaging to enhance the policies and practices of the companies they own and evaluating the impact of a company’s products on the lives of their female customers.

“Every day I am inspired by our many clients who make conscious decisions to align their portfolios to their values and consider investment options that help to close the economic gender gap,” said Brown.

For more information, please consult your PNC Advisor or contact PNC Private Bank.

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1. https://www.mckinsey.com/industries/financial-services/our-insights/women-as-the-next-wave-of-growth-in-us-wealth-management

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Women Are Ready for the Great Wealth Transfer

A Woman’s World

Gender Lens Investing

Important Legal Disclosures and Information