The number of high net worth and ultra-high net worth women, globally, has hit a new record, according to intelligence and data company Wealth-X’s latest report – High Net Worth Handbook 2019.
The high (HNW) and ultra-high net worth (UHNW) populations are still male dominated, with little indication that there will be equality any time soon.
The report classified HNW people as those whose worth ranged between $1m and $30m (£23m, €26m), while anyone with a $30m+ worth was categorised as UHNW.
In the latest Wealth-X report, high net worths were split 84.2% to 15.8% between men and women, compared with 86.3% and 13.7% for ultra-high net worths.
“The HNW population exhibits a more equitable gender split than the ultra wealthy population but remains heavily male dominated. The proportion of women continued to rise gradually over recent years and increased further in 2018 to a record high of just below 16%,” Wealth-X said.
Playing catch up
While this is an improvement, the road to gender balance remains long.
Sarah Lord, partner – financial planning at Mazars, told International Adviser that, even though there is not an equal wealth distribution across genders, “to a certain extent it is likely to take a generation to address as historically there has been such an imbalance that it takes time for females to ‘catch up’.”
Equally, Lord flagged up the persistent global gender pay gap issues, “which, in the main, means that females don’t necessarily have the same ability to invest as much wealth because, over their lifetime, they do not earn as much as their male counterparts”.
“Confidence can be a major influencer in how females approach their finances when compared to men, women are typically less confident in making big financial decisions. A financial planner can help and support to build the confidence which in turn will help with closing the gap.
“Furthermore, from my experience, women tend to be more risk averse and therefore typically take a more cautious approach to their investments and their wealth, which in turn over the last 10 years has potentially led to lower returns than their male counterpart.”
Mythical risk aversion?
But not all experts agree.
For instance, Olga Miler, innovator and expert on money and women and a former managing director at UBS, thinks that claims about women being more risk averse are just financial “myths”.
“They have the desire to align their investments with their values, a higher affinity to sustainable investments and will take a conscious approach to risk. This does not mean that women are more risk averse than men, but they invest differently.
“Clarity of language, transparency on fees, transparency on risk and return expectations and a human, personal experience are the key success factors in serving women. The question remains if this simply is not what we all want to have from a trusted [financial adviser].”
A long road
While the path to gender equality is long, it is also very unclear.
Is the belief that women are more risk-averse just something we accept because it is stated so often, as noted by Miler? Or is Lord right, and it will take a generation for women to shake off the inequalities of the past?
This is something only time will tell, but global trends are shifting towards a more balanced, gender-equal landscape – just, perhaps, not as quickly as we all would like.
