How wealth is changing for women

Financial equity is a key aspect of gender equality. The aims of the United Nation’s Sustainable Development Goals include the eradication of gender disparities in society and equal access to economic resources, property ownership and financial services for women.

Throughout history, women have been financially disadvantaged by social structures and attitudes. But the landscape is changing. In education, the economy and the world of wealth, women are becoming more influential. Despite the different challenges they face, women are increasingly generating their own wealth. A momentous transfer of wealth between generations is putting a larger share of financial assets in the hands of women too.

Women are making educational gains

Education is a marker of women’s progress. More women are enrolling in higher education than ever before. Global school enrollment data from UNESCO shows women have actually overtaken men in percentage terms at the level of tertiary education¹. This development reflects a wider trend of gender parity in education. According to UNESCO, as many girls as boys are now staying in school to age 16².

Higher education is a good investment for women due to the strong correlation between college completion and wealth accumulation. Put simply, a college degree is a useful qualification for building wealth. In the US, women with graduate degrees earn over a USD 1 million more than high school graduates³.

More women are working towards their own wealth

These educational gains have occurred alongside the growing participation of women in the job market. In 1950, women represented 29.6% of the US workforce. By 2015, nearly half of US workers were female (46.8%)⁴. Women are breaking through the glass ceiling too: more than 40% of US companies have three or more women at executive management level.⁵

The COVID pandemic was a setback for women’s ability to build wealth. More women lost their jobs or left the workforce than men — and ended up taking on more of the burden of home schooling, household and family management as a result. But female employment has bounced back strongly since, while Credit Suisse research suggests the normalization of remote and flexible working could open up more economic opportunities for women⁶.

Wealth is coming to women

Women are also poised to benefit from the transfer of wealth from the baby boomer generation. McKinsey & Co predicts women will inherit a sizable share of the USD 30 trillion in financial assets that will change hands in the US alone in the next decade, either as spouses or the next generation⁷.

These assets will often be accompanied by existing wealth strategies and professional advisors. McKinsey & Co has highlighted differences in approaches to wealth and investment between the genders that advisers need to understand. Women are more likely to seek professional advice than men, for example, and tend to favor capital protection over more aggressive investment strategies.

Time to think about asset classes

Nannette Hechler-Fayd’herbe, Chief Investment Officer of International Wealth Management and Global Head of Economics & Research at Credit Suisse, agrees that female investors typically favor more conservative asset classes like fixed income over equities. This helps explain why men have accumulated more wealth than women historically.

Nannette describes the current interest rate environment as a moment of opportunity for women. The fixed income asset class is in sync with their investment preferences. At the same time women should get ready to increase their exposure to equities when market conditions improve, since equities are a fundamental component of a balanced, multi-asset class investment strategy.

Building wealth for life

Nannette believes women’s distinct needs, preferences and characteristics as investors require a nuanced approach. She is an advocate of lifecycle investing for women, which recognizes the different challenges women face in building wealth as they manage the demands of family, work and aging.

Lifecyle investing lets women adjust their investments to reflect their financial goals and needs as they evolve over time. By enabling women to successfully build and pass on wealth, such strategies can help eliminate the global gender wealth gap that puts women at a financial disadvantage — and make financial equity a reality.