The Economic Impact of a ‘Horizontal Wealth Transfer’ From Men to Women
By Brian Famigletti, Managing Director & Head of Marketing
The Horizontal Wealth Transfer
A “great wealth transfer” is underway. Over the next two decades, an estimated $84 trillion is expected to be passed down from the older generations to their younger cohorts. Much has been made about the financial implications of this phenomenon for millennials, who stand to inherit the bulk of those funds. But another demographic might see those benefits much sooner. Before the great wealth transfer, some economists expect a “horizontal wealth transfer”, from male Americans to their female spouses.
Baby boomer men are typically older than their wives. So their wealth may be left in the hands of the family matriarch, before being passed to their children. U.S. women are estimated to receive $9 trillion of the wealth transfer over the coming years. Here’s how that might impact the broader economy.
Related reading: What the Multi-Trillion Wealth Transfer Means for Markets and the Economy
Unique Financial Priorities
Financial priorities may differ from gender to gender. More money in the hands of women could potentially lead to an influx of capital for some sectors — and to fewer investments in others.
Historically, women have devoted more funds to philanthropic work than their male counterparts, meaning charities and non-profits might benefit from a horizontal wealth transfer.
Women are also more apt to invest in companies that make an impact, a 2022 poll by Cerulli Associates shows. So wealth transferred from men to women could potentially rejuvenate the popularity of environmental, social, and governance (ESG) investing, which has taken a hit in today’s political climate. Additionally, ripple effects are already being seen in the luxury sector. Women’s watches are one of the fastest-growing segments for Italian fashion brand Bulgari, per CNBC reporting. The company predicts women will only continue to gain purchasing power in the coming years.
A Beneficial Partnership
According to research by McKinsey & Company, women are also more likely to seek financial advice than men. Consequently, the markets may see more managed wealth in the near-term, as more women rise to the ranks of high-net-worth investors and seek informed ways to deploy capital.
For anyone who has just inherited wealth, partnering with a financial advisor may be a logical next step. Trusted advisors can help you stretch your funds, achieve your goals, and make a positive impact to boot. If you need help managing your wealth, reach out to the advisors at Griffin Asset Management today.
Sources:
CNBC: Women are set to inherit trillions of dollars in the great ‘horizontal wealth transfer’
Industrial Thought: The Horizontal Wealth Transfer: what does it mean for wealth managers?
Financial Post: Posthaste: The ‘great horizontal wealth transfer’ is coming — and it could change a lot
Forbes: The Great Wealth Transfer: What It Means For Women And For The World
Washington Post: The wealth transfer from baby boomers mostly benefits women
CNBC: Women prefer values-based investing. Here’s what that might mean for their wealth
