December 11, 2023

Professional women are closing the pay gap between themselves and their male partners, in some cases now earning more. But financial advisors still don’t pay enough attention to them.

in a UBS study on women published in June Fifty-seven percent of respondents said they were the primary source of income for the household, and advisors and other financial professionals mistakenly believe their spouse or partner is the breadwinner.

“We found that less than half of female breadwinners (44 percent) feel that the industry treats them the same as men,” UBS said in the report, part of the Swiss news agency’s “Own Your Value” series of studies on women. One of Fortune’s reports. The report surveyed 809 “high-income” U.S. male and female investors in January 2023; each respondent had a personal annual income of at least $175,000, or matched another person earning that amount Significant people get married or live together. About 43 percent of primary earning women have at least $1 million in investable assets.

Given the rapid rise in women’s wealth and earning power, the missed opportunity for advisors is enormous.Although Gender pay gap persists across the countryyoung professional women under 30 earn the same or more than young men under 30 22 metropolitan areas across the U.S. Including New York City – The world’s largest urban wealth management market — According to data released by the Pew Research Center in 2022. The Pew Research Center also found that in 107 of the 250 metro areas it studied, women under age 30 earn only 90% to 99% of their younger male counterparts.

Women also now outnumber men among college-educated workersPew said in September, this may be an attempt to make them Lifetime Income Advantage than the non-college-educated workforce.

The Pew Research Center also reported in April The number of American heterosexual households in which the husband is the sole or primary breadwinner fell from 85 percent in 1972 to 55 percent in 2022; the number of wives in this role increased from 5 percent to 16 percent over the same period. In about 29 percent of marriages in 2022, both spouses will have roughly the same income.

Women are also set to inherit substantial inheritances as part of the vast wealth transfer that is underway. Estimated assets of $84 trillion From the Baby Boomers — About $73 trillion of this is expected According to Cerulli Associates, it will pass to heirs by 2045. McKinsey also predicts that some $30 trillion in wealth transfers will change hands by 2030, In a report in 2022, said American women are expected to receive “the majority” of that amount.

read more: Women in America and the $30 Trillion Opportunity in the Wealth Management Industry

McKinsey says women already control about a third of U.S. households’ investable assets, or about $12 trillion. “As men pass away, many cede control of these assets to their female spouses, who tend to be younger and live longer,” the company said. According to an earlier report in 2020.

However, judging by the UBS report, the financial advisory industry still has a long way to go as it collapses on deadline. Some 64 percent of female breadwinners surveyed said the financial services industry skews women, and 63 percent said they believed the industry primarily catered to men.

Complementing these issues is the fact that female primary earners have lower confidence in themselves as household financial decision makers than when surveyed by men as primary earners. UBS said in the report that only 49 percent of female breadwinners said they would prefer to be the breadwinner, compared to 87 percent of the male breadwinners in the study who said they would prefer to be the breadwinner. Reflecting the pressure of “traditional gender roles” on these relationships.

Furthermore, “only about half of women who are female breadwinners have financial responsibility, from day-to-day expenses and bill payments to long-term decisions such as investing and financial planning,” UBS said.

These women try to play their expected roles. Half of the main earners said friends and family of the couple thought the men earned more, and the women never corrected their views. They also often reported doing more housework despite earning more money than their male partners. Male primary earners are much less likely to be involved in housework and childcare.

The UBS report found that women who are the primary breadwinners in same-sex relationships are more likely to be in control of household finances. About 65 percent of these women said they were satisfied with making more money than their partners, 65 percent said they make financial decisions for the couple, and 70 percent said they were “very knowledgeable about overall investing” — which is Showing that in the absence of social pressure, women are more willing to take leadership roles according to gender norms.

read more: Why wealthy women lag behind men when it comes to estate planning

However, the financial services industry is underserving these women here too – 80% of same-sex primary earners feel the industry is not meeting their needs.

Female primary earners in the survey overall said their top financial priority was retirement planning (86%), followed by maintaining an emergency fund (74%), tax planning (70%), budgeting (68%) and long-term Care Planning (67%) – Advises advisors to focus on holistic financial planning to target affluent working women.

“By focusing on holistic planning and empowering women breadwinners as decision-makers, we can help them find their own path to achieve most important financial goals for them,” said a press release about the study.

“We have to really focus on educating advisors” about women as wealthy professionals, Michelle Barry, president of Grove Point Financial, a Rockville, Maryland-based wealth manager, said in an interview. The number of people and potential customers is constantly increasing. . Grove Point, an independent broker-dealer and registered investment advisor owned by Kestra Holdings, is Sell ​​it to Atria Wealth Solutions.

“People are seeing this in their local communities; they’re seeing more and more female business owners, female executives,” Barry said. “This could be where the next generation’s wealth lies.”

However, while Barry said she has seen evidence that women are equally comfortable with male and female advisors, women as clients often require a different approach than advisors who may be used to working more with men.

“They need to be heard. They need to be brought into the conversation,” Barry said. “They may need to explain things more thoroughly or more completely because they are open to a lot of information.”