Why everyone benefits when women are richer
New Zealand Prime Minister Jacinda Ardern, German Chancellor Angela Merkel, International Monetary Fund MD Christine Lagarde, Democratic vice-presidential candidate Kamala Harris and the increasing number of women sitting on corporate boards are clear indications of the big strides women have made around the world.
This is good news for women, certainly, but not only women benefit from this process. Research done by UN Women shows that a community’s health, education and child nutrition improve when women earn more.
The role of women in the economy has changed enormously over the past few decades and is destined to change further – putting more women in charge of more assets than ever before.
McKinsey’s 2019 Women in the Workplace survey shows that over the next decade, vast sums of money is expected to change hands. “The biggest driver of this shift is demographics. Today, roughly 70% of US affluent-household investable assets are controlled by baby boomers. Furthermore, two-thirds of baby-boomer assets are currently held by joint households (where a female is present but not actively involved in financial decisions), meaning that roughly $11-trillion in assets are likely to be put into play. As men pass, many will cede control of these assets to their female spouses, who tend to be both younger and longer lived.”
The survey says that “after years of playing second fiddle to men, women are poised to take centre stage”.
This shift poses a question to companies – will they continue doing things the way they have for decades or change to meet the demands of more powerful and wealthy female clients?
“Over the next three to five years, as women increasingly take responsibility for making their households’ financial decisions, they will become the critical battleground for wealth management firms,” McKinsey states.
Along with women having access to more wealth is the trend for women to start and run their own businesses, changing the face of economies around the world.
More women are part of the prestigious high-net-worth club (those people who own $1-million or more in assets), according to a study conducted by The Economist Intelligence Unit and sponsored by RBC Wealth Management.
This influence is expected to rise further as millennial women (born 1981-2000) have been entering the high-net-worth club faster than their Baby Boomer counterparts (born 1946-1964). In other words, this is not an aberration, but a trend that is likely to intensify.
But the world that is opening up for more women is not only for in the elite high-net-worth group. Janine Basel, CEO of Akro Capital, who spoke at Women & Wealth webinar, found that the experience of running a home, familiar to women everywhere, gave her the edge when she worked at a large engineering company.
No one would claim that the fight for equality is over – there is a long way still to go – but big changes have taken place in terms of an increase in the number of women controlling and making big money around the world. This has huge benefits for everyone – rich and poor, male and female – and bring enormous opportunities to those who are ready and willing to run with them.