How women's rising wealth is reshaping the global economy
We may not need to travel to China, India or Brazil to witness the world’s largest emerging market. It could be right under our noses: women’s wealth.
The number of female billionaires globally rose by 18% in 2017, outpacing the increase of male billionaires by 3.5%. This raised women’s share of the global billionaire population to 11.7%1.
”Women have more financial power than ever before, with more than 60% of the US’s wealth expected to be in their hands by 2025,” explains Karen Frank, CEO of Barclays Private Bank and Overseas Services.
This shift not only empowers women, it also has a wider societal and economic impact.
Lisa Francis, CEO of Barclays Private Bank, UK and Ireland, said: “Reports show that women are out-living men. They are often the family matriarchs being left with significant wealth.”
Women have more financial power than ever before, with more than 60% of the US’s wealth expected to be in their hands by 2025
Women's wealth management
Research shows that women tend to make better investors. Teams of all-female hedge fund managers returned 9.95% during the first seven months of 2017. Whereas the performance of hedge funds across all strategies and genders returned 4.81%, according to data from the HFRI Fund Weighted Composite index2.
Despite this, only about 10% of fund managers are female2 and non-professional female investors are still being held back by a lack of confidence. In the UK, only 38% of women compared to 53% of men said they feel confident making investment decisions, according to insight and strategy consultancy BritainThinks3.
Wealthy women may turn to wealth advisors and private bankers in this scenario. However, they also tend to have different wealth management preferences to their male counterparts, with an emphasis on security, accuracy and privacy4.
Female HNWIs tend to be more open to digital technology and have a greater willingness to share their experiences online4.
“Female preference around growing protecting and managing their wealth can vary considerably from their male counterparts,” commented Frank.
“Therefore, it is fundamental that we understand all of our clients’ motivations to ensure our solutions are tailored and relevant,” she continued.
The more generous gender?
It’s not just the way that women are investing wealth that differs to men; women also tend to spend it differently.
Research shows wealthy women are more likely to invest in philanthropy5 and impact investing6 than men. Take, for example, Fran Perrin, a member of the Sainsbury family and Barclays Private Bank client.
Perrin is the founder and director of The Indigo Trust which focuses on the impact and potential of the internet and mobile technology in Africa. She set up the trust when she was only 19.
She has also been an advisor at the Prime Minister’s Strategy Unit and is a Board Member for the Institute for Philanthropy.
Last year, she co-founded 360Giving with her husband William. It aims to help grant-makers and philanthropists share data.
Perrin said when she started out, there was far less support than is offered today: “No one was teaching me how to be a philanthropist. In the UK there is a bit of a sense that it’s a gentleman’s hobby.
“You run a major corporation and in your spare time you do some philanthropy,” she explained.
Women are a force to be reckoned with, by 2025 we will hold over 60% of the UK’s wealth.
Tamara Gillan, CEO of Cherry London and founder of WealthiHer, an UHNW women’s network, commented: “Women are a force to be reckoned with. By 2025, we will hold over 60% of the UK’s wealth.
“We believe the female attitude to wealth, with a desire to seek new opportunities for family and investments that promote social change and a better life for others as well as ourselves, means this is good news for everyone,” she said.
The business case for women
Whilst women will receive 70% of $41trn in intergenerational wealth over the next 40 years7, a growing number of self-made female entrepreneurs are starting businesses at more than twice the rate of men8.
Average wealth for the near-10,000 female entrepreneurs that fall into the world’s ultra high net worth (UHNW) camp is at $60m, around half that of the global UHNW population, the World Ultra Wealth Report 2018 found9.
This is good news for the global economy as companies that embrace female leadership are proven to be more financially prosperous.
In fact, companies run by female CEOs in the Fortune 1000 see three times the returns as S&P 500 enterprises being led predominantly by men, a study by Quantopian10 found.
The study used an algorithm to calculate returns to investors in every Fortune 1000 company during the time it was run by a woman. It then compared this data to companies being run by men during the same timeframe.
Female-led companies outperformed non-women led businesses with a 340% return verses 122%, respectively.
Despite this, women are still dramatically outnumbered in senior leadership.
Women held only about 10% of the top executive positions (CEOs, CFOs and the next three highest paid executives) at US companies in 2016 to 2017, according to a Pew Research Center analysis of federal securities filings by all companies in the benchmark Standard & Poor’s Composite 1500 stock index.
Only 5.1% of chief executives of S&P 1500 companies were women.
This is not for lack of trying. Women have outnumbered men in higher education since the late 1970s11. This represents a major change from the early 1900s when only 19% of all undergraduate college degrees were earned by women.
This is true across the globe, including Kuwait, Qatar, Oman and the UAE12.
Barclays Private Bank is proud to announce that it is a founding partner of WealthiHer – a network for UHNW women. It has been establish to champion the diversity in women’s wealth. The network’s end goal is better servicing female investors and returning greater impact, for the benefit of everyone.