Women are amassing greater wealth than ever before and becoming a huge economic force. In Western Europe, women investors now control roughly a third of total assets under management, valued at some EUR 4.6 trillion. It’s a similar picture around the globe. In the US, women control more than a third of total household financial assets, over USD 10 trillion, while women in Asia are expected to hold USD 27 trillion in wealth by 2026.
“It’s part of a broader global trend where women are playing a more prominent role in financial decision-making,” says Simmie Leung, Julius Baer’s Head of Wealth Planning in Hong Kong. She cites various reasons for this evolution. “A substantial portion comes from inheritance, as intergenerational wealth transfer becomes more gender-neutral,” says Simmie. “But what’s truly inspiring is the growing number of women who are self-made entrepreneurs and corporate leaders. These women have created wealth through their ventures or climbed the corporate ladder to attain significant executive positions.”
The change also reflects changing dynamics within couples and families. “One significant trend we’re seeing is the joint or equal participation of couples in wealth management and decision-making. More and more spouses are managing their wealth separately, making independent decisions on their portfolios,” says Simmie. “This means that we engage both partners equally, respecting their individual perspectives and goals.”
Source of wealth and knowledge outweighs gender when it comes to risk appetite
Research suggests that women are more risk averse than men when it comes to managing their wealth. For Lucia Desmarquest, Relationship Manager for European clients, this is an oversimplification. “Indeed, studies show that most women perceive men to be more comfortable with taking risks in investing. However, this difference subsides when we address what holds female clients back.” According to Lucia personalised advice that builds on the client’s existing knowledge as well as access to networks of like-minded female investors are two truly empowering means to help women find and develop their own investment style.
“I struggle to identify any one single defining pattern,” Lucia says, giving an example of one married couple where traditional investment behaviours are reversed: “The husband created a business in a risky industry, so he’s more conservative in his approach to investments, whereas the wife, educated in finance, is bolder and likes to invest in higher-risk assets.”
Lucia believes that a person’s risk appetite depends less on gender and instead to a larger extent on their background and on how they came into their money. “It’s only natural that a person who has inherited modest wealth and starts to invest is more conservative than one who grew up in a wealthy entrepreneurial family and has been exposed to wealth matters from a young age.”
An aspect that from Lucia’s point view can make a difference is to pay attention and respond to the communication needs of her female clients. “Women like straight talking.” She says this shouldn’t be confused with a lack of patience. “Women are willing to put in the time to ask questions and learn more about topics they don’t understand. It’s my experience that in most cases they end up mastering the subject very well and becoming highly successful investors.”
Although a substantial proportion of women investors express a willingness to receive more advice from their wealth manager, Simmie adds that the tendency among women to ask questions or take more time to evaluate various factors before making decisions should not be misconstrued as a lack of confidence. “The women I serve are highly educated and don’t lack self-belief when it comes to making financial decisions,” says Simmie.” Instead, she believes women often prefer a more consultative, empathic approach. “It’s important that we develop a personal rapport with our female clients and be trusted advisors to them, especially when they’re going through rough patches. The relationship comes before the business.”
No longer the ‘silent partner’ in the room
Stephanie Delaporte began her career in banking as an assistant relationship manager. Now, in her role as Head of Client Strategy & Experience at Julius Baer International in London, she supports client-facing colleagues by exploring ways to help them bring the whole of the Bank to clients, which includes initiatives to increase the empowerment of women investors.
She believes that in wealth management, as in other walks of life, access to knowledge is the key. “It’s a myth that finance is ultra complex,” says Stephanie. “If we can provide more education and make the world of finance more accessible to women, we’ll create greater trust and strengthen female investors’ confidence.”
Julius Baer International is a signatory of the UK Women in Finance charter, a shared commitment by financial services firms to build a more balanced and fair industry. As part of this, the Bank strives to recruit more female talent as well as supporting efforts to increase financial literacy, for example through the Wealth Matters education programme. Stephanie explains that a lot of work has been put into ensuring communication takes place on an equal footing. “When banks serve couples, historically the main dialogue has tended to be with the man. This is clearly changing now.” she says. “But where we still see a ‘silent partner’, we proactively work to bring them in, ensuring they understand what the different asset classes are, how we set up their portfolio, and whether they have a solid understanding of risk and return.”
“I believe it’s our responsibility to support our clients in developing their investment expertise,” Lucia adds. “But I also had to learn that it’s very easy to become overprotective towards female clients, in particular when they are at the beginning of their investment journeys. As bankers, we have to pay special attention to this unconscious bias and listen carefully.”
Investing with purpose
A 2022 study by the WealthiHer Network found that 75 per cent of women believe investing responsibly is more important than the returns they generate, with female millennials particularly focused on sustainable investment. This has implications for how financial institutions approach this demographic. “An important aspect of wealth management is the ability to direct capital,” says Stephanie. “Young female clients in particular have a strong sense of purpose – they want their investment decisions to align with their ESG principles and to see the impact of those decisions. Relationship managers need to be able to clearly articulate what that impact is.”
This is becoming even more relevant as the number of women entrepreneurs who found companies or invest for impact is increasing. “The rise of the female investor can be a game changer for some sectors,” Lucia points out. “Women are now able to give a boost to industries that matter to them, including few that have historically received less interest, such as Femtech or women’s health.”
Regulatory landscape and culture impacts level of inclusion
Many of Lucia’s clients are based in Central and Eastern Europe, where the first generation of entrepreneurs to benefit from the free market is reaching retirement age and transferring wealth to their offspring. She sees that the trends among female investors are shaped not only by generational but also cultural and regulatory factors. “Under communism, it was normal for women to study and work full-time,” says Lucia. “Young women in that part of the world are inspired by mothers and grandmothers who were actively engaged in running businesses and managing finances.”
However, Lucia underlines the importance of regulation in financial inclusion. “Some jurisdictions oblige spouses to submit joint tax declarations. In states where that doesn’t apply, there’s no obligation for couples to sit together and openly review the development of their financial affairs.” Likewise, while countries like Switzerland give banking clients the possibility of a joint account, accounts in many other jurisdictions can only be held under a single name. “We sometimes still see that if spouses are reticent to discuss those issues, their partner and children can face difficulties in the event of a divorce or illness, and it can even lead to situations where they are cut off from significant parts of the wealth,” says Lucia.
Importance of the bigger picture
How well positioned is the wealth management industry today to understand and value women’s financial inclusion? “We’re seeing that female investors value advisors who take into account not just their financial situation but also their life goals, their family dynamics, and their personal values,” says Simmie. “This involves more in-depth conversations about their concerns and aspirations, as opposed to focusing solely on transactions or financial gains. Julius Baer’s highly personalised and holistic approach, combined with our expertise in areas such as wealth advisory and impact investing, sets us apart from our competitors and helps us build a deep level of trust.”
Stephanie emphasises that the continued focus on greater diversity and inclusion at Julius Baer and in financial services more broadly is not only ‘the right thing to do’ but also makes good wealth planning sense. “By empowering women to make informed decisions and take responsibility for their financial future, we’re paving the way to long-term prosperity not only for them and their families but also for society as a whole.”