Young, wealthy women entrepreneurial, take lead in family finances: survey
Young women with money are far more entrepreneurial and idealistic than their mothers’ generation, and they wield more control of the family estate than ever before.
That’s according to a new survey, conducted by The Economist Intelligence Unit, that explored generational perceptions around wealth by canvassing 1,050 individuals with at least US$1 million in investments.
Respondents were divided into three categories: millennial women ( born 1981 to 2000); baby boomer women (1946 to 1964); and men of all ages.
Clear differences of opinion could be found in a number of areas, including the fact that younger women seemed more interested in directing their wealth to social causes — even at the expense of their children’s inheritance.
Whereas 22 per cent of older women were more inclined to keep charity and investment decisions separate, only seven per cent of younger women could say the same, instead choosing to invest alongside their principles.
Younger women were also more likely to bequeath wealth to charities, reflecting a greater sense of obligation to society as a whole. Nearly one-quarter (24 per cent) of young women expected to leave some of their wealth to a charitable organization, compared to six per cent of older women and only five per cent of men.
Tony Maiorino, vice-president and director of RBC Wealth, which commissioned the study, says that, although younger women may intend to contribute more of their wealth to social causes, that may change over time.
“Historically, we’ve seen some of this before, if you think about the ’60s,” he said. “I think it’s easy to say that you’re going to leave more money to charity and not to your family when potentially you don’t have a family to leave it to. As a 40-year-old or a 50-year-old with a teenager who’s about to go to university, that perspective may shift.”
They have opportunity for education (and) they’re getting in places that they weren’t able to access fully and freely before.
The report also found that, unlike older women, younger women were more likely to claim that they were the primary decision-makers in a number of financial areas.
An extraordinary 72 per cent of younger women said they were the primary decision-makers in the household when it came to financial planning, as well as charitable giving (for 67 per cent) and household purchases (for 54 per cent).
That’s no surprise, Maiorino says, given that women these days tend to amass wealth before they meet their spouses, so it’s only natural that they would want to maintain some control over their finances.
“You’ve had a say. Now that you’re married, you’re not going to step away — you’re going to continue to have a say,” he said.
Men, meanwhile, believed they had greater control of day-to-day banking decisions, with 73 per cent identifying as the primary decision-maker in this category.
Older women identified as the key decision-maker about half the time across all categories, but couldn’t lay claim to any particular area where they had more clout than their spouses.
The study also found that millennial women were more entrepreneurial than their baby boomer cohort, which may have something to do with where they got their money.
Younger women were more likely to have earned their wealth not through inheritance, but rather through business ownership: 50 per cent of wealthy young women earned their money this way, compared to 37 per cent of older women.
When asked to identify the greatest opportunities for generating wealth, 41 per cent of younger women homed in on “greater resources to support starting a business” compared to 27 per cent for older women and 21 per cent for men.
The shift to entrepreneurship may reflect changing times: Whereas previous generations of women may have sought equality and respect in the workplace, younger women may be choosing to bypass the corporate rat race altogether.
Maiorino, for his part, doesn’t believe women have suddenly become more ambitious; rather, he thinks the numbers reflect opportunities that simply didn’t exist before.
“They have opportunity for education, they have opportunity for networking, they ’re getting in places that they weren’t able to access fully and freely before,” he said.