Women Poised to Benefit from 'Great Wealth Transfer'

Bloomberg

Watch Women Poised to Benefit from 'Great Wealth Transfer' - Bloomberg on Dailymotion

Transcript

00:00We've been talking about this great wealth transfer for quite a bit of time. I mean,

00:04purely demographics when we think about aging baby boomers and then who ends up receiving

00:09those funds. I want to start with you, April, the economic implications of these changes and

00:14what it means for new trends when it comes to investing, saving and, of course, giving.

00:18Well, it's huge. It's as you said, it's the intersection of all of these different factors

00:23coming together. There's never been a better time to be in wealth management. I would say

00:29the opportunities for financial advisors and for all firms that are serving in financial services,

00:36that sector of women is gigantic because you have financial advisors that are retiring.

00:43You have women inheriting more money. It's actually more of a wealth transition we're going to talk

00:50about rather than a wealth transfer. It's actually vertical, right? Women live longer. And so before

00:56that wealth transfer has happened, there's going to be a wealth transition. Why is that an important

00:59distinction? So I started my firm 17 years ago talking about the wealth transfer and it actually

01:05hasn't really happened. You still, from those McKinsey stats, you have people still talking about it's

01:11going to happen. It's happening. Is it happening? And now, and people were under the impression that

01:16the transfer was also going to go to Gen Z, but actually it's going to go to Gen X. And Gen X are now in

01:23their 60s and approaching retirement themselves, some of them. So I think it's more complicated

01:28than what people think. And so it's important to pull it apart and understand more about what's

01:32happening. Nick, I want to bring you in. So how much do things change when it comes to

01:37the investing world and the approaches? Like how much is going to be different? Because I,

01:42you know, it's interesting that, you know, we sometimes men versus women and the distinctions,

01:46but is it all that different? Yes. So there's going to be significant change. I think all the data shows

01:51that women are very, very passionate about using their investments and their philanthropy to fulfill

01:56specific purposes and to ensure that they have impact in a way that might not have happened in

02:00the past, or they might not have had the tools to do that always in the past. There's been a strong

02:04trend towards philanthropy among older generations, but female clients, particularly the younger generation,

02:09are more focused on measuring that impact, generating that impact, and also making money through

02:14purpose-driven activities. So we're on the impact side of things. Where does that end up going?

02:19So it varies, right? So you can look at it through a sustainability framework. A lot of clients

02:24prefer to look at a sustainability framework, targeting things like the environment or social

02:28causes. I thought we stopped caring about that. Well, some clients don't choose to look at it

02:32through a sustainability framework, right? It varies depending on the client, but a lot of clients

02:37target the same underlying causes, whether or not they use a sustainability framework. You can target

02:42healthcare as a client through your investments, through your philanthropy. You can use the sustainability

02:47framework to do that, or you can not use the sustainability framework. There are various

02:50different ways of cutting the pie. I want to bring you in on the same thing. Like, you know,

02:54why is it so different? But we hear from Nick that, yes, it will be different.

02:58Also, to your point, I think sometimes the U.S. is very U.S.-centric, and whereas that might be true in

03:05the U.S., our book is for a global audience, and that has not died down in Europe and Asia. Impact

03:12investing, sustainability is really hot and is something very important. I love that you went

03:17there. We're just coming off the U.N. General Assembly, and we did a big broadcast last Wednesday

03:22from the Plaza. Bloomberg does a big event, a global forum, and I felt like most of who we talked to,

03:28a lot of European officials, and yes, talking about alternative energy, renewables, how it financially

03:34makes sense that nothing's changing, and that really struck me in those discussions.

03:38Well, it struck us because here in the U.S., we are, the changing administration has really

03:43changed the tone when it comes to renewables, and also when it comes to foreign aid, and pretty

03:47much every guest we spoke to, Carol, at that event was talking about how to maximize the impact of

03:52foreign aid and how to maximize the return from renewables. Yeah, I think it's kind of fascinating.

03:56So that's one of the reasons why we went global on this book, and we spoke to 80 senior leaders

04:01across the world because more and more firms are global in nature, and more and more people are

04:06mobile in nature, and so having a better understanding of what our world is and technology

04:11connecting us is truly important. Even visiting some of the headquarters of some of the firms,

04:18you can see a huge difference where some firms are very traditional in the way that they look.

04:23Other firms have a more sustainable approach, as Nick was saying. You see firms that have more green,

04:29more exposed brick. You know, in London, they've purchased a building and have redone it,

04:35something we don't really see here in the U.S., where we're just going to, you know, knock the

04:39building down and build something back up again, but there's an effort to create sustainability

04:44and demonstrate it through their brand. What does this mean in terms of money flow? So we are Bloomberg,

04:49and that is something, whether it's a fund advisor or whatever, you know, Tim and I constantly talk

04:55about, so where the money goes. So, Nick, where does the money go potentially as we see this money,

05:00this wealth transition? Where does it go? Is it greener, sustainable efforts? Is it more global

05:07efforts? Like, how do you see it playing out? I think alternatives are a big piece of this.

05:12We're seeing increasing capital flow towards alternative investments, specifically towards

05:16things like private markets, but also digital assets, right? And we've seen the rise in vehicles

05:22that will enable that, right? Be those through new types of vehicles that wealth management clients

05:27can more easily access, or also increasingly through retirement plans, right? We saw the

05:31executive orders the other week. That's an important part of it. Also, international is a

05:35very important part of it. I think people thought with deglobalization that it would just make people

05:39more domestic. In reality, it makes your international footprint more complicated, and we're seeing a

05:44lot of wealth managers retool in order to account for that greater international footprint.

05:48April, I want to finish where we started with you, and you said that there's been no greater time to be in

05:52wealth management. If you would have told me 10, 15 years ago that that would be the case for 2025,

05:57I wouldn't have believed you, because we saw the rise of robo-advisors, passive investing,

06:04the idea of setting it and forgetting it, which I thought millennials would be doing.

06:07Make the argument and make the case that people are paying that higher fee to get that personalized

06:12advice. So it's really the confluence of all these different things happening. It's more and more

06:17advisors retiring its volatile markets. As the mother of two Gen Z kids, I'll tell you that they're more

06:24conservative than what people think. And I think they want to have bigger brands that they rely on. So I

06:31think there's an opportunity there. I think that there is a general need for more financial literacy and

06:41around that because in even for financial advisors, I was just going to add one more thing, which Nick

06:47and I always talk about. There's been a real shift in who is a financial advisor and how to recruit

06:53people into it. Only 15% of the workforce is women. And traditionally, finance majors have been recruited.

07:00And now, not so much.

Category

Transcript

Be the first to comment

Recommended