Women Will Command $113T Wealth: Advisors Miss “Fluency Gap”

Women Poised to Control Trillions, Yet Financial Advice Falls Short

In a significant shift in global economic power, women are set to command over $113 trillion in assets within the next decade, representing a substantial 45% of global wealth. Despite this impending financial dominance, new research suggests that the financial advisory industry may be ill-equipped to meet the unique needs of female investors, creating a critical “fluency gap.” A study by HSBC in partnership with Ipsos and Know Your Value, based on a survey of over 2,000 investors with more than $100,000 in assets, reveals that many women are already deeply engaged in their financial futures but feel unsupported by their current financial institutions and advisors.

Understanding the “Fluency Gap”

Raquel Oden, Head of Wealth and Private Banking at HSBC Bank USA, explained the core issue identified by the research, which is termed the “fluency gap.” “The issue may not be confidence at all,” Oden stated, reframing the long-held narrative that women need to be more risk-tolerant. Instead, the study indicates that women possess the knowledge and are actively engaged in managing their finances. The challenge lies in the advisors’ ability to connect with and understand women’s specific life stages, priorities, and investment approaches. “Knowledge is step one. Second piece of where we’re moving into now which is the opportunity is the fluency. And fluency very and for the markets and advisors to give advice for women based on where they are in their life cycles,” Oden elaborated. This suggests a need for financial professionals to move beyond generic advice and tailor strategies to the nuanced realities of women’s financial journeys.

Generational Wealth and Philanthropy: Key Priorities for Women

The study highlights distinct financial priorities among women, particularly concerning generational wealth and financial responsibility for others. Approximately 45% of women surveyed are focused on building wealth for their children and other beneficiaries, a figure notably higher than the 33% of men who share this focus. This emphasis extends to a strong inclination towards philanthropic giving, with 43% prioritizing local community support as part of their financial plans. Huma Abedin, Vice Chair of the 3050 Summit and a contributor to Know Your Value, emphasized the importance of advisors recognizing these deeply held values. “So that statistical difference really means when you’re advising women, you have to account for their children, their grandchildren, their age and parents, their longevity, we live longer. And very importantly, very focused on philanthropic giving. That’s at the core of the core tenets of what is important to women,” Abedin noted.

Navigating Life Stages: The “Financial Glow-Up”

The research, aptly nicknamed “The Financial Glow-Up,” underscores how women’s financial needs and priorities evolve significantly throughout their lives. The study breaks down these shifts across different age groups:

• In their 20s: The primary focus is on preparing for children, making significant purchases, and accumulating wealth through career advancement.
• In their 40s and 50s: Priorities broaden to encompass caregiving responsibilities for aging parents, managing marriage or divorce, and planning for longevity and retirement.

Oden stressed that financial institutions must adapt their services to acknowledge these life cycle changes. Factors such as caregiving, a role disproportionately held by women (with 60% acting as caregivers for parents or in-laws), and time taken off for childbearing can significantly impact wealth accumulation. “The importance of that as well as childbearing age when they’re taking time off potentially for children. So all these factors definitely impact wealth for women, but if there’s a plan around that, it’s actually empowering,” she explained. The goal is to “meet women where they are as opposed to how men think.”

Bridging the Gap: What Financial Institutions Can Do

While the study points to a significant gap, it also offers a roadmap for improvement. The core message is the necessity for financial advisors and institutions to foster “fluency”—the ability to provide advice that is not only knowledgeable but also deeply relevant to women’s lived experiences. This involves understanding the unique intersection of career, family, caregiving, and personal financial goals that characterize women’s financial lives. “Very important that we move from literacy to fluency, which we are. And I want to be super clear. Gen Z, millennials, I mean, quite honestly, at the highest levels we’ve ever seen. That’s the great news of that. We now need to move from knowledge to knowing what to do, how to do it. And that’s where the fluency piece comes in,” Oden emphasized.

“We now need to move from knowledge to knowing what to do, how to do it. And that’s where the fluency piece comes in.” – Raquel Oden, HSBC

The Future of Financial Advisory for Women

As women’s control over global wealth continues to grow, the financial services industry faces a critical juncture. The “Financial Glow-Up” study serves as a wake-up call, urging a shift from generic financial advice to personalized, life-stage-sensitive strategies. The key lies in developing “fluency”—an empathetic and informed understanding of women’s diverse financial priorities, including their strong focus on family, legacy, and philanthropy. Financial institutions that can successfully adapt their approach to resonate with these needs are poised to build deeper client relationships and better serve the burgeoning female investor market. The coming years will be crucial in determining whether the industry can bridge the fluency gap and empower women to fully realize their financial potential.

Source: Women will control $113T in wealth — but advisors may not be ready (YouTube)