The host of “Tomi Lahren is Fearless” talks about whether workers treat women fairly and why millennials are delaying marriage on “Making Money.”
There are huge undercurrents impacting the world of wealth management in the United States that continue to expand due to changing demographic, cultural, family, and career trends. This is the largest transfer of wealth this country has ever experienced, and financial advisers say they are already witnessing it.
a McKinsey & Company research A report released in 2020 found that by the end of this decade, women will control much of the unprecedented $30 trillion in wealth held by baby boomers, which is the largest percentage of US annual GDP. “A potential wealth transfer of a magnitude approaching that of the United States.”
It is estimated that approximately $30 trillion of wealth will be in the hands of women by the end of 2010. (Getty Images/Getty Images)
At the time of this study, men were the primary financial decision makers in two-thirds of wealthy American households, but that is rapidly changing. More than three years later, the data shows that it’s not just baby boomer women, or wealthy women, who are increasingly taking control of household finances.
Tracy Bell, director of equity investment strategy at First Horizon Advisors, told FOX Business that while the increase in assets managed by women has been occurring across generations, data shows that the reasons for the change vary by age. , said that research has shown that there are significant differences around the age of 45.
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In the baby boomer generation, women typically (with many exceptions) take over control of household investments after the death of their husbands. Women tend to live several years longer than men, and a McKinsey study notes that 70% of widows change financial advisors within a year of their spouse’s death.
In its own research, First Horizon found that women over 45 are far less likely to rate themselves as having “excellent” financial knowledge compared to younger women. . The older a woman is, the more likely she is to end up in the traditional situation where her spouse is the primary custodian of the household’s wealth.
Data shows that younger women are more likely to be educated about financial investment decisions than older women. (license/image)
This is not the case with the younger generation. For women under 45, Bell says, “the situation is very different. These women are much more career-oriented; [managing wealth] for ourselves for longer. ”
Bell cited U.S. Census data showing that the average age at first marriage for women was 22 in 1980, but is now 28. There’s also more emphasis on women’s education now than in previous generations, with women now earning 44.1 percent of bachelor’s degrees, Bell said. compared to 21% 40-odd years ago.
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“What we found is that young women tend to do more self-education and are more financially independent,” Bell said. “They know to ask the right questions and are more likely to seek professional advice than men, which is a good thing. I mean, they know what they know, but at the same time They also know what they don’t know. That’s one of the strengths that we recognize, especially in young women.”
According to Bell, women have been shown to be demographically better at making financial investment decisions because they look at their decisions holistically and hold them together over time. He said that this is because there is a tendency to stick to it.she pointed to something University of California, Berkeley research The results show that female investors outperform men over time, a result that can be directly attributed to men becoming overconfident and making more trades.
A frequently cited study from the University of California, Berkeley, found that female investors tend to outperform male investors over the long term because they are more likely to stick to their investment decisions. (license/image)
Bell is an evangelist who educates women who are not yet involved in household financial planning and those who are already involved.
She warns women that they are at a disadvantage compared to men in many ways when it comes to building adequate retirement savings. Women tend to earn less, live longer, and have bigger jobs. A lifelong gap due to caring for children and parents.
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“Start the financial planning process as soon as possible,” Bell said. “That’s really important so that when you reach the end of your life, you have the assets you need to take care of yourself.”
