An unprecedented amount of assets will shift into the hands of US women over the next three to five years, representing a $30 trillion opportunity by the end of the decade.
Attracting and retaining female customers will be a critical growth imperative for wealth management firms. To succeed, firms will need to deeply understand women’s differentiated needs, preferences, and behaviors when it comes to managing their money. Firms can then diversify their offerings and commit to a systematic approach to winning with women.
As part of recent McKinsey research on affluent consumers, we surveyed over 10,000 affluent investors, nearly 3,000 of them female financial decision makers. We also leveraged analysis from McKinsey’s proprietary PriceMetrix solution. The resulting insights, highlighted in this article, provide a rich view into affluent women as investors.
For decades, wealth management has been a male-dominated endeavor. Not only are the vast majority of financial advisers men (female representation is just 15 percent across channels), but also the customers making financial decisions are far more likely to be men than women. In two-thirds of affluent households in the United States, men are the key financial decision makers.1 But this is about to change.
Women as the new face of wealth
Today, women control a third of total US household financial assets—more than $10 trillion (Exhibit 1). But over the next decade, large sums of money are expected to change hands. The biggest driver of this shift is demographics. Today, roughly 70 percent of US affluent-household investable assets are controlled by baby boomers.2 Furthermore, two-thirds of baby-boomer assets are currently held by joint households (where a female is present but not actively involved in financial decisions), meaning that roughly $11 trillion in assets are likely to be put into play. As men pass, many will cede control of these assets to their female spouses, who tend to be both younger and longer lived. In the United States, women outlive men by an average of five years, and heterosexual women marry partners roughly two years older than they (Exhibit 2). By 2030, American women are expected to control much of the $30 trillion in financial assets that baby boomers will possess—a potential wealth transfer of such magnitude that it approaches the annual GDP of the United States.
