Women Poised to Benefit from 'Great Wealth Transfer'

Bloomberg

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

Transcript

00:00There is this incredible wealth transfer and also wealth concentration when it comes to women.

00:05So let's get into it. In this week's Women, Money, and Power, we're exploring

00:08how this shift is creating huge implications for how vast sums of money are invested,

00:13philanthropy, and the way that wealth is passed on to the next generation.

00:17Back with us is Jamie Majira. She is head of U.S. Wealth Advisory and head of retirement

00:22at BlackRock. It's the world's largest asset manager. They notched a record $13.5 trillion

00:26in assets. It's up from a million when we last talked in June, and we got the figure when BlackRock

00:31reported. I don't know that I said your name correctly. Majira. Majira. Majira. Okay. It was

00:36great. It's pretty crazy Tuesday. Just like it's spelled. Majira. Just like it. I really like Jamie,

00:40so I want to get it right. Great to talk with you. How are you? Great. It's really good to be back with

00:45you. Well, you know, we are talking about the environment generally, so let's start there.

00:50I know we did that over the summer when we talked because BlackRock just sees so much in terms of

00:55the funds it oversees and the flows, and the flows continue to grow, but that doesn't mean the flows

00:59are always going in the same places. What can you give us insight in terms of where money is going

01:04and where money is going out of? Yeah, so first of all, excellent to be here, and you started by

01:09talking about flows. I'm going to take a gender perspective on flows and talk to you a little bit

01:14about where we see money going globally with women, and so women more and more are earning wealth.

01:21They're acquiring wealth. They're owning wealth. They're playing a larger role in capital markets.

01:26They are investing and benefiting from these capital markets, and we think there's no better sign of

01:31hope in the future than having people invest and grow along the capital markets. Is it because they're

01:35earning it themselves, and they're having some say, or is it also in terms of couples because they are

01:39often breadwinners as well that they also have a say at the table? Yeah, so it's both, right? So when you

01:45think about women, women are more often now becoming breadwinners, primary breadwinners quite often.

01:50They're also contributing to household along with their spouses. They're earning more money,

01:55but they're also acquiring, and you mentioned the wealth transfer. We think about that in two ways.

02:00There's the intergenerational wealth transfer where they're gaining assets maybe from their parents

02:04as they pass away, but the more interesting one is this horizontal transfer, right? So if a spouse

02:10passes away or if there's a divorce, women are acquiring assets in that way, and they need financial

02:17advisors to help, they're reshaping the industry, and women have just not been served in the way

02:22they need to be served in the past. Think about that, right, with Melinda Gates. We think about it

02:25with, you know, Jeff Bezos. No one died in the Gates couple. No, but I'm just saying there was

02:30big divorces, and all of a sudden you had significant players certainly in wealth overall, but also in

02:35philanthropy. Yes, yes. Actually, Cerulli estimates that globally $124 trillion will change hands in this

02:44silver tsunami, and then their current forecasts are that $54 trillion will be passed to spouses first

02:54before it goes down another generation. So 40% of those spousal transfers will be to women. So this is

03:01what Sally Krawcheck calls the feminization of wealth, and the idea is that when, or the important

03:08idea I think here for you, for your industry, is that when women get hold of this money, they often

03:13don't stick with their same wealth managers. They often say, you know what, I'm going to go with

03:18someone else now. So what do you do if you want to get hold of a piece of that pie? Yeah, so maybe I

03:24might even just dimensionalize what you mentioned, because I think about it in percentages. So today,

03:29let's call it women responsible and controlling 30% of the world's wealth, that will be 50% by 2030,

03:35that will be 70% by 2070. So these are big numbers, big numbers. Yeah. And women, as you say,

03:41they do things differently, right? And they want to do things differently. And oftentimes when they're

03:45getting a hold of this wealth, right, when wealth is passing to them, either through their parents

03:49and family or through their spouses, they want to do it differently. They want to be served differently.

03:5370% of women leave their husband's financial advisor after a divorce or a death within one

04:00year. Wow. 70%. Why is that? Because they oftentimes felt not heard, not part of the

04:07conversation, not at the table and making decisions. You know, there's a lot of misconceptions around

04:12women, right? People think women aren't engaged with finances, just not true. A third of US households

04:17have women as the primary financial decision maker. People think women or call women perhaps a bit

04:23risk averse. Well, that's what I wanted to ask you. Are women risk averse? Like, give me an idea

04:28when they, were you talking about investments? I mean, we've been thinking about the AI trade or

04:32private assets. Are they risk averse? So we did a study to make generalizations, but I'm curious if

04:37there are. So, okay. So not a monolith, right? Women are very different. All my friends are different

04:42than me. We all do different things and need different things. But generally speaking, we did a study

04:47with 2,500 female investors. When we talked to them about their risk tolerance, the majority of

04:54them were actually moderate to aggressive because they saw the power of not just gaining wealth

05:00through working or through transition, but actually gaining wealth through the capital markets,

05:04right? Investing in items that will, and securities and portfolios that will actually help them grow

05:09their portfolio. Private markets is a great example. Again, for a financial advisor to play that role

05:15and help a, and coach and guide a woman and how she thinks about her portfolio across public and

05:21private. Last time we were together, we talked about direct indexing and the role of taxes or,

05:25or, you know, women oftentimes want to, you're laughing. Gets me excited. Direct indexing.

05:30Yeah. You know what? I anchored the ETF show for a long time and that's a big part of that

05:34discussion as well. You know what? It's not just women. Obviously kids are going to

05:38get hold of a lot of this money. And I think I'm not sure about women, but I know with younger people,

05:46they want to do more impact investing than their parents did or their grandparents did.

05:51So is that also a key to try? Because I'm thinking from the perspective of a wealth manager who wants

05:55more business. So what I need to do is say, Hey, I can, I can set up some direct indexing for you and

06:01I can help you make an impact with the money you invest. It's not just to make more money. You're also

06:06going to change some part of the world that you want to. Is that the case? It is. And I like to

06:10use the word purpose, uh, because actually impact has many different meanings. And so if I'm a

06:15financial advisor and I'm working with a younger client or a woman, I'm going to be talking to them,

06:20by the way, men too, right? It's not just about the impact you're having. You could invest in a way

06:25that maybe aligns with your values, right? Maybe you have certain values that are important to you to

06:28hold in that portfolio. I love motorcycles. So I would want to buy holding. There we go.

06:33But you know, I often wonder about that because you know, if you care about the environment,

06:39but if an, if an investment doesn't pay, do people, are people doing that because they believe

06:45in it, but it may not return as much as something else. I'm going to give you an answer that will be

06:50terribly unfulfilling. It depends. Okay. Right. So there are people, and by the way, let's step away

06:55from the portfolio for a moment and say, what about philanthropy? Um, this is where I come back to

06:59purpose, right? People are looking to put their money to good cause and that might be philanthropic.

07:05It might be impact in their portfolio. It might be aligning with the values I have. It might also

07:09be sending my children to school or helping my elderly parents, right? Or starting a new business,

07:14right? How about that for purpose? Or shielding your money from taxes, right? I mean, um, I guess I'd

07:20be willing to take somewhat of a loss, uh, by putting my money into a philanthropic vehicle.

07:27Um, especially if it's compared to a much bigger loss by giving it away to uncle Sam and state and

07:32local, uh, and federal taxes. And again, that's where I look at things in a vacuum. You have to

07:37look at them, right? Overall holistic wealth planning. And again, the role of a financial advisor is

07:41critical there. Um, got to ask you just in general, when you look at this environment and we talk a lot

07:47about a bubble right now, I don't know what is, what is your take on it? What are you, or what are

07:52the conversations you're having with clients about how they feel about, are they a little nervous

07:55about that trade? Yeah. We talk about, I mean, we talk to clients, advisors and clients, institutions

08:02globally all the time. Um, look, the markets are the markets and there are long-term investors that

08:08need to just keep staying with the markets. We talk about, it's not time in the mark or timing the

08:12markets. It's time in the markets. Um, the other thing though, is you just have to acknowledge

08:17that there's uncertainty out there, right? There is volatility. There are things going on in the

08:21markets that again, everyday people, let's take it to America and Americans, everyday people need

08:26professional advice. They need someone they can trust that will help them navigate that through

08:30professionally managed solutions or through advice. Um, but there is uncertainty out there,

08:35but again, we come back to it's time in the market, not timing the market. Um, 20 seconds,

08:42Jamie. I mean, are more people feeling comfortable putting money to work? Are they after kind of a nice

08:47bounce from the April lows or they're like, I'm good, I'm done. I want to be a little bit more

08:51conservative just quickly. No, we are seeing, we are seeing flows into portfolios in ways that are

08:56across. As I said, BlackRock was up a trillion dollars since the summer. We talked, we are having

09:00the best conversations we have ever been having with financial advisors, institutions, and wealth

09:05managers across the world.

Category

Transcript

Be the first to comment

Recommended