We’re not saying we’re in the same league as, say, Nostradamus when it comes to predicting the future, but the team at InvestmentNews has a pretty good idea of what advisors should be on the lookout for in 2023.
Inflation and grassroots philanthropy might propel women to fully come into their power in 2023 as managers of family assets.
Financial advisors have long lamented the overall reluctance of women to assert themselves as household financial and risk managers. Now, the tipping point appears to be at hand, driven by the unlikely convergence of higher prices, more experience with strategic charitable giving, and career momentum. Meanwhile, the demographics of gender appear to be shifting as Gens Y and Z clarify their identities, potentially reordering perceptions of LGBT representation in households and the workforce.
“Women are having an aha moment,” said Camille Valentine, senior vice president with UBS Boston. “Women tend to want to protect the downside and take less risk, generally speaking. When the market goes through a period like this, there’s a renewed appreciation for this,“ she said, referring to the market volatility of 2022. And when women feel validated, they assert their views in management of the family portfolio, Valentine said.
Three women dominated the 2022 philanthropic scene: Self-made iconic entertainer Dolly Parton, as well as Melinda French Gates and MacKenzie Scott, whose high-profile divorces from tech moguls left them with rich coffers for strategic giving. Their examples are not lost on women, said Valentine, as increasingly, women are driven to engage with household asset management specifically because they want to contribute to cherished causes.
“Women are being much more intentional about. charitable giving,” she said. “As we have a really dramatic transfer of wealth, women may be supporting different causes.” A 2022 UBS report found that women continue to see ESG investing as blending their financial goals, with 75% expecting ESG investment to have comparable or equal returns to traditional investments, and millennial women twice as likely to direct their consumer dollars to companies that ally with environmental or social good.
“Women are having an aha moment.”
Camille Valentine, senior vice president, UBS Boston
Women have plenty to manage. Inflationary pressures are hitting even high-income households hard, according to a late 2022 survey released by Finmasters. It found that 30% of people earning over $150,000 annually were working more hours; a third had sold personal items to make money; and 22.9% procrastinated on debt repayment. Caregiving parents face ingrained barriers to earning: Pew Research found that mothers still carry more at-home parental responsibilities than they did before the Covid-19 pandemic.
At least more pay transparency will equip employees with more data, as pay equity laws gain momentum in states and municipalities. The Census Bureau calculates that the pay gap widens significantly as women age, complicating decisions about career versus caregiving.
Greater detail about gender identities is reframing understanding of nonbinary individuals. About 21% of Americans born between 1997 and 2003 identify as LGBTQ. Only 2.6% of baby boomers identify as LBGTQ, illustrating gender identity as an escalating dynamic.
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