By the Numbers
MARCH 06, 2017
$11.2 trillion — Amount of investable assets handled by women in the U.S.
These are among the findings Andrea Turner Moffitt reports in her 2015 book, Harness the Power of the Purse: Winning Women Investors. Of that $11.2 trillion, nearly half ($5.1 trillion) is managed exclusively by women. What’s more, over 60% of the women who participated in a sampling across six countries characterized themselves as the principal source of their households’ investable assets.
Female investors are creating and controlling an increasing amount of assets. Their wealth is projected to grow by 7% annually over the next few years as they come into inheritances and increasingly run their own businesses, according to a recent study by Boston Consulting Group. Between 2007 and 2016, in fact, the number of female-owned U.S. firms surged 42%, five times faster than the national average, based on a report commissioned by American Express OPEN.
Those trends show no signs of slowing down. Turner Moffitt describes these women as “economic powerhouses” who are not only generating wealth but determining how it should be allocated.
Are they getting a good return on those investments? While women are as financially literate as men, many say they aren’t as confident about their financial acumen. That might explain why they tend to be more conservative with investments than their male counterparts.
“Women, in general, are more risk averse,” says Lynne Knox, senior vice president, investment counselor at Capital Group Private Client Services. Knox, who advises a number of high-net-worth female clients, points out that being too conservative about investing carries its own risks — specifically missing out on the opportunity to grow assets over the long-term.
“This issue is increasingly important, given that women have a longer life expectancy than men,” adds Knox. “Even if you’ve delegated investment and financial decisions to a male partner over the years, it’s never too late to get involved. You can delegate a lot in life, but not money. Be part of the master plan; engage with your money.”
All investors could benefit from the advice of a professional. Yet Turner Moffitt reports in her book that slightly greater than half of the women surveyed did not have a financial advisor. It’s important to work with someone who understands your goals and is committed to helping you reach them. While women have come a long way, they’re really just getting started.
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