Affluent American women have been motivated by significant events over the past two years — the pandemic, social activism, and geopolitical and economic uncertainty — to use their purchasing power, investments and career choices to drive greater change, according to survey results released Thursday by UBS.
“Women’s commitment to leading meaningful lives coupled with their growing financial clout are the twin engines that can propel them to make an even greater impact,” Paula Polito, vice chairwoman of global wealth management at UBS, said in a statement.
UBS conducted the survey from Jan. 24 to Feb. 7 among 1,400 female investors across the U.S. Women between 25 and 30 in the sample had at least $250,000 in investable assets, those 31 to 39 had at least $500,000 in investable assets, and those 40 and older had at least $1 million in investable assets.
As part of its report, UBS laid out a framework that the firm’s financial advisors use to help women uncover what is more important, identify their life’s goals and build portfolios to achieve them. This framework can be adapted to other advisors’ relationships with female clients.
The framework lists five questions to get to the core of women’s ambitions and passions:
- What excites you about the future?
- Who are the people who matter most to you?
- What impact would you like to have on your loved ones and community?
- What keeps you up at night?
- How do you plan to achieve your life’s vision?
The framework presents three strategies to give women a clearer understanding of where their money is, and why:
- Liquidity — the next three years. To help provide cash flow for short-term expenses, and to help maintain lifestyle. Why it matters: Helps take emotion out of investing because the client has made a plan for what she needs.
- Longevity — four years, and lifetime. For longer-term needs, and to help improve lifestyle. Why it matters: Allows the client to focus on long-term financial goals.
- Legacy — now, and beyond lifetime. For needs that go beyond those of the client, and to help improve others’ lives. Why it matters: Helps the client plan to make a difference for the people and causes she cares about.
Money and Purpose
Over the past two years, the pandemic, social activism, economic uncertainty and other events have prompted 82% of women to consider what is most important to them. Seventy-two percent say they want to make a bigger difference in the world. And 68% are more committed to using their financial resources to effect change.
Eighty-seven percent of women believe money is a tool they can use to fulfill their purpose. This is evidenced by their actions: 94% have donated money or volunteered time in the last 12 months; 73% have made purchases aligned with their values; and 69% have chosen a career that aligns with their values.
Seven in 10 women have increased their philanthropic support in the last 24 months, 53% by volunteering time, 50% by giving money and 38% by offering expertise.
Women across generations share an interest in numerous causes, albeit with different areas of focus. Among these causes are the following:
- Poverty (37% overall): millennials 29%, Generation Xers 38%, boomers 54%
- Education/children’s programs (37%): millennials 36%, Gen Xers 35%, boomers 37%
- Religious organizations (25%): millennials 23%, Gen Xers 19%, boomers 34%
- Domestic violence (24%): millennials 29%, Gen Xers and boomers 18%
- Alma mater (22%): millennials 26%, Gen Xers 19%, boomers 15%
- Social justice/advocacy (21%): millennials 27%, Gen Xers 16%, boomers 11%
Aligning Investments With Values
Seventy-nine percent of women consider investments based on environmental, social and governance factors highly appealing, and 74% expect comparable or better returns than those provided by traditional investing. Only 47% of women, however, hold these types of investments in their portfolios.
Millennials Push Ahead
In the wake of the pandemic, millennial women are far ahead of their older peers in using their money to fulfill their purpose and create positive change. Fifty-two percent of millennials ensure that their investments align with what matters to them, compared with 24% of boomers. Fifty-one percent of younger women make their purchases align with their values, versus 24% of the older women. And 41% of millennials have found more meaningful work, whereas just 11% of boomers have done so.