Natacha Onawelho-Loren

Why women are writing the future of wealth

With International Women’s Day approaching, Natacha Onawelho-Loren, Managing Director of the Accuro Swiss Office, looks at the increasingly important role that women play in creating and preserving wealth.
There can be little doubt that women’s relationship to wealth is rapidly changing. More women than ever before are creating, managing and inheriting wealth, with that trend set to accelerate further over the next few years.

The progress is even more remarkable given the considerable barriers women have had to overcome. Historically, society was slow to acknowledge and include women in business and financial decision making. My own profession must shoulder some of the blame, with wealth management and finance having long been male-dominated professions. Even now, recent figures from the UK Financial Conduct Authority revealed that just 16% of financial advisers are female, creating the risk that women investors are underserved.

I’m pleased to report that Accuro is very much bucking that particular trend, with 70% of our staff being female. And not only do women operate at all levels of the organisation, we represent every stage of the female journey, from youthful graduates to mothers with children and those supporting elderly parents. That understanding of the individual and multiple needs of women and their families is, I believe, vital in supporting the sort of good decision-making that will not only preserve wealth but create a positive future across generations.

The facts on female wealth

Before looking at the broader challenges, let’s first focus on the facts. Taking the world’s biggest economy as our example, women already control a third of total US household financial assets, adding up to a staggering $10 trillion. But that may only be the beginning of a far bigger shift. As the so-called baby boomer generation age, more and more wealth will transfer to women because, not only do we live on average around five years longer than men, we also typically marry partners two or three years older. As a result, analysts expect that the majority of US wealth will belong to women by 2030.

Although that may be good news for those fortunate enough to inherit valuable businesses and investments, it also presents a huge challenge as many older women, unlike their younger counterparts, have traditionally not always been heavily involved in financial decision making within their relationships.

In my own experience at Accuro, I have helped many highly capable women who, on the death of their partner, have had a huge amount of stress – on top of their grief – in fully understanding and gaining control of the family assets. All because their partner had, probably for the best of reasons, kept such matters largely to themselves.

The sad irony here is that the deceased or seriously ill partner may well have dedicated their working life to securing the family’s wealth for future generations, only to leave behind a widow who was unprepared for the task of doing so. Fortunately, good advice can go a long way to addressing such problems retrospectively, but there is no substitute for putting plans in place well ahead of any life-changing event.

Starting crucial conversations across generations

There are also inter-generational challenges as daughters and even granddaughters, empowered by their education and experiences, may want to take a more active part in the family business and finances. This can be a great advantage. After all, who better to play a part in preserving and protecting the family wealth for future generations? However, it’s important to recognise that the older generations who typically control the finances may take a slower route to involving younger family members, particularly if those women have not traditionally played key roles in the family business.

The crucial role first step for me in this situation is surprisingly simple: starting conversations, between partners or across generations, so that all parties can have a voice and decisions can be made with a truly long-term view.

Women and risk – myth or reality?

It’s interesting to note that we’ve got this far without any mention of investment strategies or asset types. But one question that regularly crops up in this context is whether women have a different attitude to risk than men. That may seem slightly nonsensical when, like me, you’ve met successful female entrepreneurs who have risked everything to build highly successful businesses. However, there are plenty of studies which support that risk-averse view, showing, for example that women are far more likely to choose fixed-income investments over risker equities.  

At the risk of doing my own stereotyping here, that bias away from riskier investments could also be partially explained by the observation that women, as traditional caregivers and raisers of future generations, naturally have more of an eye on the long-term and so their choices will inevitably differ from those of the more responsibility-free risk taker. It’s also interesting to note that women are more likely to take social and environmental values into account when investing, suggesting that a long-term, more community-minded approach may be in our nature. 

Let’s take a final, sideways look at the subject through a parallel with the world of corporate M&A dealmaking. Recent research from Bayes Business School, City, University of London shows how, when buying another company, female CEOs are more likely to seek advice, are more risk-averse and tend to seek out targets with stronger performance metrics. Interestingly, according to the same research, female CEOs often get better post-deal results because of that greater caution. It’s a fascinating subject with many arguments either way, so I’ll leave you to draw your own conclusion.

Looking ahead

Whatever you conclude, one thing is certain: the next generation of women are growing up with very different attitudes and aspirations, showing that women can simultaneously be caregivers, entrepreneurs and excellent stewards of family wealth.

No longer a niche demographic; the future of wealth will increasingly be written by women.

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