Op-ed: That is why ladies’s cash decisions will form the long run for the US
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The growing economic power of women in this country is one of the most significant financial changes in the last few decades. Conclusion: women generate and manage more and more wealth in the USA
Today, women control more than $ 10 trillion (approximately 33%) of the total financial wealth of US households. Meanwhile, an unprecedented amount of assets will end up in the hands of US women over the next three to five years, equivalent to $ 30 trillion by the end of the decade. Why? Because when men die, they leave control of those assets to their female spouses, who are typically both younger and live longer.
This is a wealth transfer of such magnitude that it approaches the US annual gross domestic product
“This is a tremendous transfer of wealth in and of itself, but since women traditionally outlive men, women inherit most of it,” said certified financial planner Marguerita Cheng, CEO of Blue Ocean Global Wealth in Gaithersburg, Maryland. “As more women have a say in important financial decisions, it’s easy to see that they are not doing business as usual.”
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For example, if you’re a branded consumer goods company, a financial services company, or selling real estate, for example, women will make most of these decisions in the years to come. The acquisition and retention of female customers is therefore a decisive growth factor for your company. To be successful, businesses of all types need to truly understand women’s needs, preferences, and behaviors when it comes to spending and managing their money.
Women continue to make more financial decisions on behalf of the household and more women are turning to investment decisions as well. According to a recent article in Fortune magazine, women lead the way when it comes to environmental, social and governance investments.
In general, a higher percentage of women are interested in ESG investing than men, says CFP Cathy Curtis, CEO of Curtis Financial Planning in Oakland, California. A study by Calvert / Investment News found that use of ESG funds was up 25% year over year and the trend in ESG investing is more pronounced among women, with 53% currently doing so.
“The Covid-19 pandemic has exposed the inequalities of our financial and health systems as disadvantaged and poor people lose their jobs and their lives,” Curtis said. “As a result, where the environment has been the focus of ESG investors, social and governance have become critical and are driving inflows into ESG products.
“As women inherit more wealth from their parents and spouses, and sometimes make investment decisions for the first time in their lives, I expect more money will go into ESG and impact investing,” she added.
As women make financial decisions that have long-term implications for society, the environment, and overall business performance, small businesses and large corporations must step up to find ways to support social issues such as climate change, racial and gender inequality, and social justice.
Companies preparing for the transition from affluence to women could see revenue growth four times faster, according to a report by McKinsey & Co.
“Businesses need to understand a woman’s needs, preferences, and behaviors when it comes to managing their finances. I’m not sure they’re ready,” Cheng said.
In general, women are not only responsible for the household income, but are also responsible for managing the money and making the majority of financial decisions.
By then, nearly 9 in 10 women who are married or living with a partner said they had a hand in spending and investing decisions in their household, up from just 42% in 2012, according to a recent report by Hearts & Co. Wallets, a consumer research company.
Studies have confirmed that women approach wealth management differently than men. They tend to be less risk tolerant and more focused on life goals.
Times change. When wealth falls into the hands of women, financial services and corporations as a whole must commit and adapt to find ways to better meet the needs of women customers and consumers.
– By Ted Jenkin, CEO / Founder of oXYGen Financial