Women’s financial influence has grown significantly over the past several decades. According to the Pew Research Center, women now outpace men in terms of college enrollment and graduation rates.* This progress is reshaping the workforce as women take on more high-skill and leadership roles and emerge as primary decision-makers.

Yet our December 2024 study, “Understanding Female Investors,” found that women’s personal investing journey has not followed the same trajectory. Despite making notable strides thanks in part to federal legislation and financial tools geared toward them, many women still face barriers to achieving their financial goals.

According to the 2020 McKinsey & Company report, “Women as the next wave of growth in US wealth management,” women control a third of total U.S. household assets, more than $10 trillion. By 2030, McKinsey expects that women will oversee a significant portion of the $30 trillion in financial assets currently held by baby boomers. And that figure could grow as women are poised to inherit much of the wealth resulting from the great generational wealth transfer.

This will mark the largest shift of assets in history, as baby boomer wealth – estimated at $84 trillion – moves to Gen X and millennials, as reported in the 1Q 2023 edition of “The Cerulli Edge—U.S. Retail Investor Edition.” Women, with their longer life expectancies, stand to inherit wealth first as a spouse before passing it to the next generation. This underscores the need for financial strategies tailored to women’s longevity, life stages and evolving financial priorities. 

What have we learned?

Our study, “Understanding Female Investors,” revealed that despite these advancements, many women still face significant hurdles when it comes to investing, often stemming from financial complexity, lack of confidence and perceived risk.

• Compared to one in four men, one in three women say their financial situation is complex. Nearly half of women (48%) say investing is too difficult to understand, versus 28% of men.
  
  
• Women find financial jargon and investment strategies to be overcomplicated, discouraging engagement. This presents an opportunity for financial professionals to offer clear guidance. 
  
  
• 65% of women in our study have a positive financial outlook compared to 79% of men. This may influence women’s decision to avoid taking on risks.
  
  
• 59% of women in our study have hesitations about investing. However, this discomfort decreased with age, with 37% of Gen Z women indicating, “I don’t know where to start,” compared to only 9% for baby boomers. Baby boomers report fewer hesitations about investing overall.

How financial professionals can help

Financial professionals play a critical role in bridging the confidence gap and breaking down barriers that prevent women from investing. To better serve female clients, financial professionals can:
 

• Simplify complex financial concepts, provide starting points that are clear and actionable, and offer goals-based investment planning that aligns with women’s long-term objectives.
  
  
• Drive education and engagement by hosting women-focused financial workshops and fostering open, jargon-free conversations. Consider hosting a family wealth briefing to bridge the gap and address any concerns.
  
  
• Offer flexible financial planning solutions that consider career breaks, caregiving and evolving wealth dynamics that help women feel empowered by their financial decisions.

These insights highlight the need for a tailored approach when engaging women in financial conversations. Building confidence starts with making financial education accessible. By fostering open discussions and providing practical guidance, financial professionals can empower more women to take control of their financial futures.

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