By Cristina Catania and Jill Zucker
“Remember the ladies … Do not put such unlimited power into the hands of the husbands,” Abigail Adams wrote to her husband John Adams in 1776, 20 years before he became the second president of the United States. Nearly 250 years later, her guidance remains excellent advice — particularly for wealth managers.
U.S. women control considerably less wealth than men, but the gap is narrowing fast. Due to demographic and social changes, women are getting richer and controlling more family wealth. In 2023, women accounted for about one-third ($18 trillion) of U.S. wealth; by 2030, that could be 38%, or $34 trillion.
Most women-owned assets, however, are not formally managed, while 55% owned by men are. This pool of unmanaged assets means that women may not be earning the returns they could. It certainly means that wealth managers are missing an opportunity.
Chart: U.S. financial assets controlled by women ($ trillions)
That is one insight from recent research by McKinsey & Company, which included a survey of 13,000 investors as well as in-depth interviews with wealth managers. Here is another: Women have distinctive goals and expectations — and other than the occasional marketing campaign, these are generally unrecognized and unaddressed. A third is that women increasingly are confident about their money skills — rising from 48% in 2018 to 61% in 2023. Even so, many women are seeking support to gain even more confidence in their financial decision-making.
To better serve women — and to get a piece of the additional $16 trillion that could be in play by 2030 — wealth managers cannot just keep doing what they are doing. Instead, they need to make real changes in what they offer and how they interact with women.
Focus on needs, not just wealth. When it comes to their money, the evidence is that women have a slightly different emphasis from men. For example, the research found that women value in-person consultation more. While of course women want excellent returns, they care even more about reaching specific goals, such as ensuring their retirement savings will last; managing healthcare and long-term care costs; and maintaining quality of life. With that priority in mind, women favor a more cautious investment strategy, confirming previous research that found women put a greater share of their assets into fixed-income investments. For wealth managers, the priority, then, should be to develop a range of products and services that meet the needs of clients wherever they are. In doing so, everyone will benefit, but women a bit more.
Find expertise that’s the best match. Neither men nor women appear to care much about the gender of their adviser. But the wealth managers we interviewed believed that having women on their teams did help them find and keep clients, particularly at inflection points where women are apt to reconsider their finances, such as divorce or widowhood.
Having more women professionals on board also could help guard against the all-too-common assumption that men make the financial decisions in the family. The advisers we spoke with noted that the tendency is to consult women more on things like budgeting, and to direct long-term conversations toward men. Having a pool of advisers at work who are women also could be an asset in connecting with younger women and, thus, build long-term relationships.
At the moment, fewer than a quarter of certified financial planners are women. Because many advisers are thinking about their own retirements, this is an ideal time to consider strategies to attract more diverse talent.
To better serve women — and to get a piece of the additional $16 trillion that could be in play by 2030 — wealth managers cannot just keep doing what they are doing. Instead, they need to make real changes in what they offer and how they interact with women.
Develop financial strategies oriented to different profiles. The research identified six broad investor archetypes, based on age, wealth and behavior; each offers its own opportunities. For example, it may be possible to build relationships with younger (ages 25-45), financially engaged women as they accumulate wealth. Accounting for 15 to 25% of women, this cohort is tech-savvy, cost-conscious, and interested in banking and wealth consolidation. By analyzing these archetypes, financial institutions can design value propositions to address core needs, values, and preferences and then deliver them via different channels.
By using data-driven insights, wealth managers can develop new ways to serve different kinds of clients, including women and younger investors. Given the amount of money in play, and the historically high level of dissatisfaction with current offerings, this represents a significant opportunity.
The bottom line: When it comes to money, men and women share more in common than where they differ — but the differences are real. Addressing women’s financial needs is a matter of acknowledging those differences; getting to know women better; and then acting on that knowledge. Firms that do so will position themselves to win a big chunk of the additional $16 trillion that could be in play in the next few years. And those that fail to heed Abigail Adams’ advice risk seeing an increasingly powerful block of investors go elsewhere.
Cristina Catania is a senior partner in McKinsey & Company’s Milan office. Jill Zucker is a senior partner in New York.
