In the financial advisory community, much of the discussion about women has centered on the differences between the sexes when it comes to investing, wealth accumulation and mortality. Women live longer, earn less and tend to be more risk averse than men. But that focus is too limited, writes Mellody Hobson, president of Ariel Investments, in the latest GreenMoney EJournal.
“Women increasingly make up significant percentages of the total work force” in the global economy, writes Hobson. “And the share of global wealth and earnings controlled by women is rising at a rapid rate. All of these factors make women the largest emerging market in the world.”
The global income of women is estimated at over $13 trillion, and that sum is expected to rise to $18 billion by 2017, according to Ernst & Young. By 2028, the Boston Consulting Group reports, women will control close to 75% of discretionary spending worldwide, but in the U.S. they already do. Seventy-five percent of women feel responsible for everyday household spending, according to Pershing’s 2015 report “Women: Investing with a Purpose.”
On the wealth front, women in households with at least $250,000 in bankable assets and in the top quarter of high-income households control about a third of the wealth. That percentage could increase over the next two generations as women are projected to take in 70% of inherited wealth, writes Hobson.
All these statistics have implications for financial advisors, and they are beginning to move the conversation from “stark gender comparisons toward discussions that focus on how the investing world must adapt and embrace women in their own right,” writes Hobson.
Here are the trends Hobson expects: