United StatesAs older ‘baby boomers’ approach 80, the greatest inter-generational transfer of wealth in history is close at hand.
For years, the conversation has focused on the younger ‘Gen Xers’ and ‘millennials’ and their windfall inheritances, but the generational lens is not the only one worth paying attention to. The industry overlooks the gender lens at its peril: women are expected to gain control of most of that wealth – at least US$30tn – and much of it by 2030.1
Kelly Baldoni, Head of Global Women’s Strategies at Impax, spoke with Sallie Krawcheck, founder and CEO of Ellevest, to discuss how the industry, and specifically advisors, can approach this transfer of wealth with a gender lens – and why it is an essential opportunity to contribute to and participate in a more equitable society.
Kelly Baldoni: Sallie, we’ve been hearing about this impending generational wealth transfer for years: it’s finally underway but what is it exactly?
Sallie Krawcheck: A few years ago, we were talking about Boomers transferring wealth to their kids. I would add a couple of nuances. While Boomers have indeed accumulated record amounts of wealth which will eventually go to the next generation, there’s a wrinkle: first, it typically goes to the wife. In fact, 75% to 80% of women die single.2
And then it goes to the next generation of women, since both the sons and daughters inherit. And there’s another nuance: women are making economic strides themselves. More college and postgraduate degrees in the US now go to women than men.3
So, women are inheriting money, but they’re also putting themselves in positions to earn more money relative to men.
These factors combine to produce what we’re calling the ‘feminization of wealth’.
And you certainly see evidence that women are using their money differently than men; spending it differently, and investing it differently, with a focus on sustainability. Finally, one of the most interesting insights from our recent Ellevest research is that women, through the very act of getting money, become more confident.4
KB: It’s clear the role of the advisor will be critical in helping women invest this windfall. Is there a better approach (knowing that women tend to feel underserved by their advisor, if they have one) that more advisors should consider?
SK: I think it’s being a holistic adviser, talking to the whole person, and putting the pieces together.
Some of it is putting financial planners on your team and really focusing on planning. It’s fascinating to me that financial advisors tend to be men, but financial planners tend to be women.
Not so long ago, a very successful advisor said to me, “I tried to talk stocks with her, she’s not interested.” And that is exactly the point. She’s not interested in talking stocks. She’s interested in talking about her family and her aspirations. What is important to her? Ask how she wants to use her money.
What we found in the research is that women don’t want to build wealth just to build wealth. It’s not, “I need to retire with two million dollars.” It’s values-based conversations, which could drive growth for sustainable managers: “These are the things I have done and want to do, and I want to be able to do it without a stress ball in my stomach.”
It’s more financial planning oriented. “I want to buy a home. In 10 years, I want to have two kids.
I’m OK retiring later, but I want to have a “grandma on a Vespa in Italy” retirement. And while I’m doing these things, I want the earth to be a stronger and better place.”
I think the industry needs to take some warning. If we do it well, we retain the assets and there is increased demand for impact and sustainable investing.
KB: What does a successful transfer look like, specifically for women? Could this close the gender wealth gap?
SK: It will get more money in the hands of women, so I like to say women’s longevity is going to quietly do what the ‘Lean in’ movement didn’t.
But those that keep it in the bank and don’t invest are not building wealth, so they can slip back, right? You miss a few years of compounding, you miss quite a bit, so it’s important that women put their money to use, by investing to build wealth.
Right now, the industry is not set up to fully benefit. Our research found only one-third of women say they know where to turn when they receive a financial windfall. These are people receiving hundreds of thousands or even a million dollars, so many have a family financial advisor.
In contrast, many advisers are complacent. Since many of us in the financial services industry have worked in a bull market for much of our careers, I think there are many advisors who think, “My business has been growing. I’ve got a great relationship with him. She seems great. All will be well.”
Whereas she may be saying, “If I get this money, I don’t know where to go,” even with an advisor right in front of her.
It’s about trusting your advisor. You may chat with a guy on the golf course and have shared experiences. But if she doesn’t want to do that, how do you build that trust? By being hyper alert, paying attention, and talking to the whole family from the beginning (or at least from now on).
- McKinsey & Company, July 2020: Women as the next wave of growth in US wealth management ↩︎
- CDC, July 2018: National Vital Statistics Reports Volume 67, Number 5 ↩︎
- US Census Bureau, 2022: Census Bureau Releases New Educational Attainment Data
Statista, February 2024: Master’s degrees earned in the United States 1950-2032, by gender ↩︎ - Ellevest, 2024: Survey: The Great Wealth Transfer Will Make Women More Affluent And More Confident Than Ever | Ellevest ↩︎
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Sallie Krawcheck
In 2014, Sallie collaborated with Impax President Joe Keefe to create the Impax Ellevate Global Women’s Leadership Fund, which invests in the highest-rated companies in the world in advancing women’s leadership. Today, that Fund is the oldest and largest in the gender lens investing space, and Sallie serves as consultant to Impax Ellevate team.
Sallie is the CEO and co-founder of Ellevest, a digital-first, mission-driven investment platform for women. Ellevest is one of the fastest growing digital investment platforms and has been named a #24 on CNBC’s top 50 “Disruptor” list, #14 on LinkedIn’s 50 “Most Sought-After Startups” (and #2 in New York) and one of Entrepreneur Magazine’s Top 100 Brilliant Ideas. Sallie’s professional mission is to help women reach their financial and professional goals, thus enabling them to live better lives and unleashing a positive ripple effect for our families, our communities and our economy.
She is widely recognized as one of the most influential women in business. In 2020, Barron’s named her to its list of the 100 “Most Influential Women in the U.S.” Inc. recognized her as a “Top Female Founder,” and Fortune Magazine dubbed Sallie “The Last Honest Analyst.” Forbes listed Sallie as the seventh most powerful woman in the world, and she was # 9 on Fast Company’s list of the “100 Most Creative People in Business.”
Sallie is the best-selling author of “Own It: The Power of Women at Work” and is chair of the Ellevate Network, a 150,000-strong global professional women’s network.
Before launching Impax Ellevate and Ellevest, Sallie built a successful career on Wall Street: She was the CEO of Merrill Lynch, Smith Barney, US Trust, the Citi Private Bank, and Sanford C. Bernstein. She was also Chief Financial Officer for Citigroup. Prior to that, she was a top-ranked research analyst covering the securities industry.
Sallie received a Bachelor of Arts, summa cum laude, from the University of North Carolina at Chapel Hill and an MBA with honors from Columbia Business School.
Kelly Baldoni
Kelly is a subject matter expert on gender lens investing. She has honed and expanded the firm’s practice management resources helping institutions and financial advisors to engage more effectively with clients, specifically women and the next generation, on sustainable investing concepts.
Prior to joining Impax in 2014, Kelly worked in sales at a boutique ETF investment manager and began her career in investor services at Eaton Vance.
Kelly holds the FINRA Series 6, 63, and 65 registrations and is a registered representative of Foreside Financial Services, LLC. She has a bachelor’s degree in Human Rights from Trinity College-Hartford, and is a graduate of Wharton’s Women’s Executive Leadership programme.
Authored Insights
Q&A with Impax Gender Analytics Team
In this Q&A, Kelly Baldoni interviewed two of our gender lens investing experts, Heather Smith and David Loehwing to discuss the process of creating the Impax Gender Score and to share their insights on the growing opportunity for gender lens investors.