Get ready for the next generation of women investors

They’re building on lessons learned from previous generations of pioneering women — and shaking up the financial-services industry


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GIANNA BEGAN INVESTING YOUNG: Inspired by college accounting courses, the 33-year-old media executive started her portfolio at 19, as soon as she began contributing to a 401(k) through her job. She says that now, years later, she works with a number of financial advisors, enjoys stock-trading apps, and gravitates toward “well-thought-through higher-risk investments.”

Eunice, a 29-year-old public relations consultant, received a modest number of certificates of deposit (CDs) from her parents as a college-graduation gift; later, she says, she “put a bigger chunk of her salary into higher-yield investments — my advisor is really on-board with my interest in socially responsible investing.”

And Carla, a 40-year-old academic, points out that she has various independent investments that pre-date her marriage — “My accounts are all mine,” she says. “My husband and I are a team, but we keep investments separate.”

Boston Consulting Group estimates that women’s total assets could rise to between $81 trillion and $93 trillion by 2023.2

The evidence for young women’s growing participation in the investment world isn’t only anecdotal: “Seeing the Unseen: The role gender plays in wealth management,” a study conducted by the wealth-management firm Merrill, revealed that today’s women investors, especially those under the age of 55, are building on the hard-fought advancements won by their predecessors, demonstrating increased familiarity and proactiveness in their investing. The younger generation of women are 4.5 times as likely as older women to consider themselves very knowledgeable about financial topics and are more likely to be familiar with a variety of financial firms and investment offerings. These attitudes were particularly prominent in the youngest group of women investors surveyed — those under 35 — who scored better than their male counterparts on financial-literacy questions.1

Kirstin Hill, Merrill’s chief operating officer, emphasizes that “the efforts of generations of trailblazing women who fought for equality, access and opportunity are clearly being felt today. Younger women are empowered and driving meaningful change.” Hill points out that “women have been making great strides in all areas for years...including economically,” and that women earn more degrees than men at every level of education and so unsurprisingly women’s earnings have risen dramatically. She cites estimates that, as of early 2020, women controlled about a third of the world’s wealth, and that they are increasing their wealth faster than ever. Boston Consulting Group estimates that women’s total assets could rise to between $81 trillion and $93 trillion by 2023.2

As women increasingly take the reins in finance, wealth-management firms must make sure that they fully understand these clients in order to provide the most effective investment guidance — a fact that inspired the extensive “Seeing the Unseen” study. “At Merrill, we believe that in order to effectively serve women today, we need to understand their experiences — the similarities and the differences — and it was this dedication that drove us to develop this breakthrough research,” Hill says. “Ultimately, we hope the insights from our research, which explores unconscious behaviors in wealth management, will help move the needle for the entire industry.”

Kirstin Hill headshot
“Women investors of all generations are expecting more from the wealth-management industry. They’re coming to the financial decision-making table confident and with high expectations.”
— Kirstin Hill, Chief Operating Officer, Merrill Lynch Wealth Management

Financial she-roes

The millennial and Gen-X women interviewed for this article are well aware of earlier generations’ struggles: These investors often referenced older female family members who served as examples of financial independence and acumen. Carla’s mother, for example, rose through the ranks in a government office despite being the sole female analyst amid an entrenched old boys’ club. Eunice’s mother, an immigrant who had to restructure her life when she came to the U.S., gave her daughter some firm advice along with that gift of CDs: Eunice needed to “follow a three-point budgeting plan, split between cash, investments, and CDs or bonds.” Rebecca, a 36-year-old engineering manager, shared how she’s always been “so impressed” by her grandmother, a widowed farmer who “really was a self-made lady. She was willing to take on a lot of risk, but she diversified: She knew from farming that it’s a buffer against failure.”

Elizabeth, a retired attorney in her 70s, views the proactiveness and confidence of the younger generation with joy. “Honestly, I always felt grateful that I could manage my own money — that has not always been the case in history,” she says. “And now I’m so relieved that things keep getting better for my daughters’ generation.” She says that she’s personally noticed shifts over time in how women handle their wealth and explore investment opportunities: “It’s great! They start young, and they don’t wait to do it with a spouse.”

Elizabeth has put her finger on one of the reasons for certain shifts in the younger generation’s approach to wealth management. Hill explains, “Young adults are marrying later than their parents’ generation, and so it is more likely now that both men and women have experience managing their finances and investments independently.” That autonomy doesn’t disappear after the wedding: “‘Seeing the Unseen’ found that, compared to past generations, younger married women are more than twice as likely to be the primary financial decision maker in their family.”

Financial firms are listening

“Seeing the Unseen” found that the environment for women investors is largely supportive and unbiased: Only 8% of women investors surveyed reported having negative experiences with financial advisors due to gender bias. (These incidences often involved subtle missteps by advisors — notably, both men and women advisors — such as focusing more on the husband than the wife when consulting with a heterosexual married couple.) “We are seeing that the financial empowerment and economic gains of women are driving women investors of all generations to embrace the ownership of their financial futures, and as a result, they are expecting more from the wealth-management industry,” Hill says. “They’re coming to the financial decision-making table confident and with high expectations.” The key to meeting these expectations, she maintains, is for financial experts to listen closely to clients and share what they learn: “It’s important to understand the unique financial journeys and experiences of women investors. Sharing the results of this research study…we hope demonstrates our commitment to transparency and ultimately to women’s financial and economic empowerment.”

The findings of “Seeing the Unseen” are being used to further coach Merrill financial advisors and develop solutions for even subtle incidences of gender bias.

Across the wealth-management sphere, firms are developing initiatives to respond to the specific needs of women, and to answer clients’ demands for financial management that is not only competent and responsive but rooted in inclusion. The findings of “Seeing the Unseen” are being used to further coach Merrill financial advisors and develop solutions for even subtle incidences of gender bias; the resulting measures comprise both companywide initiatives and smaller details in financial advisors’ day-to-day processes. For example, Merrill removed the term “primary” from the page that advisors use to assign investors to roles on a joint account. Now, when couples invest together, the spouses are automatically assumed to be on equal footing — a small but significant step that the firm took after reviewing the study’s findings on incidences of bias when husbands and wives invest together.

When asked if they had their own recommendations for change, interviewees said the basics were most important. “Obviously, I want to make money,” laughed Rebecca, the engineering manager. But she also wants her advisor to listen carefully to what she says when she explains her priorities.

Gianna, whose investment portfolio dates back to her teenage years, says that she’s learned over the past two decades that it’s of paramount importance to find financial advisors who have significant experience in the areas she wants to diversify into, and who don’t jump to conclusions.

Elizabeth, who will soon celebrate her 74th birthday, said that her advice to the younger generation boils down to “start early and speak up!”

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1 “Seeing the Unseen: The role gender plays in wealth management,” Merrill and Escalent, January 2020

2 “Managing the Next Decade of Women’s Wealth,” Boston Consulting Group, April 9, 2020

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