Women are expected to receive a significant amount of the $124 trillion in wealth that is projected to changes hands through 2048, according to a new Cerulli report, released Wednesday.
Of that $124 trillion, $54 trillion is expected to first be passed through inter-spousal transfers, of which over 95% will go to women, Cerulli predicted in its executive summary of “The Cerulli Report—U.S. High-Net-Worth and Ultra-High-Net-Worth Markets 2024: The Great Wealth Transfer: Capturing Money in Motion.”
Noting that women are statistically more likely to outlive their husbands, Cerulli projected that control of $40 trillion in wealth will be first transferred “horizontally,” to widowed women in the baby boomer and prior generations between 2024 and 2048.
Of that $40 trillion, $21 trillion is projected to move between spouses considered high net worth (HNW), defined as investors with $5 million or more in investable assets.
Women of younger generations are projected to receive $47 trillion of wealth transferred intergenerationally, according to Cerulli.
The firm says this creates a huge need and opportunity for providers across the wealth and asset management spaces.
“Finances are understandably the last thing the surviving spouse wants to think about,” according to Chayce Horton, Senior Analyst at Cerulli. “This is why Cerulli recommends establishing relationships with all members of the client household as early as possible in the client lifecycle.”
The good news is that nine out of 10 HNW practices reported to Cerulli that clients’ partners were at least involved in the financial planning process, the firm said. That can make approaching widowed spouses about financial issues less difficult for both parties and has proven to increase asset retention when spouses inherit substantial wealth.
Ensuring the strength and trust of that relationship in advance is key for advisors because relationships are significantly more important for advisor choice among women investors (53%) than for men (42%), according to the firm. Female investors also have different advisory preferences and product needs.
For example, Cerulli noted, data showed women are much more likely to want advisors to lead with financial planning and strategies rather than investments. HNW women also tend to be more likely than men to prioritize philanthropic and sustainability goals.
Cerulli recommended that advisory firms take significant action toward addressing the service gap between men and women, including recruiting female advisors, adding value-added services and offering comprehensive advice.
“To address the existing gap in women-focused advice, some firms have begun to make strides by establishing recruiting and mentoring programs for women advisors and offering clients dedicated resources that emphasize topics such as financial planning and philanthropy,” Horton said. “Cerulli believes that firms that can provide direct support for women will have a tailwind for decades to come.”
Millennials are expected to inherit more over the next 25 years ($46 trillion) than Gen X households, the report said. However, Gen X will likely inherit the largest percentage of assets over the next 10 years, totaling $14 trillion, versus millennials’ $8 trillion, according to Cerulli.
Jeff Berman, Contributing Editor and Reporter at Wealth Solutions Report, can be reached at jeff.berman@wealthsolutionsreport.com.
