Why women's wealth will define the next decade of advice

When talking about the intergenerational wealth transfer as it relates to women, it is useful to look beyond demographic assumptions and see female clients as they actually are.

They are professionals, business owners, family matriarchs, and key decision-makers. They are also a diverse group of individuals, often balancing ageing parents, children, careers and other major life transitions all at once.

Women are increasingly becoming a significant share of Australia's wealth holders and primary financial decision-makers. JBWere and CoreData estimate that Australian women

are set to inherit around $3.2 trillion in the coming decades1, and become custodians of more than 65 percent of the $4.9 trillion expected to pass between generations.

Importantly, women are not a niche segment. They do not share a single investment outlook, risk appetite or common set of financial goals. For advice firms, the answer is not to create a simplified or gendered version of advice. It is to understand the person sitting across the table, recognise the experience they bring and make sure they are treated as a central part of the conversation.

Female investors are not one 'type'

One of the norms the advice industry has not sufficiently understood, or challenged, is its narrow view of the female beneficiary of the wealth transfer.

The misconception that female-controlled wealth-which McKinsey found grew faster than overall global financial wealth2 between 2018 and 2023-is based on an older ill-informed widow assuming control of investments previously managed by her husband, remains a stubborn mischaracterisation.

Wealth transfer can occur in numerous ways, such as family-business succession, gifts made during a parent's lifetime, or inheritances passing directly to children and grandchildren. The recipient may be an executive, professional, entrepreneur or experienced investor who has already accumulated substantial assets in her own right and may also be younger than advice firms expect. They may have delayed marriage, remained single, chosen not to have children or followed a financial path that bears little resemblance to that of their parents.

Advisers also need to recognise the experience clients bring. A woman who runs a business or manages a career should not be treated as inexperienced simply because she has recently become the primary wealth holder.

Risk-averse? The data says otherwise

Another of the industry's more persistent assumptions is that women are inherently conservative investors who need to be protected from risk. Again, the evidence suggests

otherwise. Research cited by JBWere3 found women in the high-net-worth (HNW) category were almost exactly as likely as men to identify as aggressive investors, 21% of HNW women versus 20% of men, while 100% of HNW women said they had moderate or good knowledge of the relationship between investment risk and return.

The important takeaway for the advice industry is that we are not simply replacing an older male client with an older female version of the same client. Wealth is moving to a generation of women who are more professionally established, more financially engaged and more willing to question the institutions and advisers around them.

They will not necessarily retain the family adviser simply because their parents did-and are more likely to ask whether the relationship reflects their circumstances, values and ambitions. If it does not, they have the confidence, information and access to alternatives required to move.

Advice firms should be careful not to equate the transfer of assets with the transfer of client loyalty. Nor should they succumb to the commercial temptation to treat women's wealth as a new client segment and create a niche proposition around it. The opportunity is to build advice relationships that recognise women as informed, capable and central to financial decision-making and to provide advice sophisticated enough to reflect the full complexity of their lives.