Share

When women, particularly younger ones, acquire US$5 million+ in assets, they tend to reach a tipping point where they take more control of their financial decisions and use their wealth to improve the world.

For example, while men at the US$5 million+ wealth level cite tax benefits as the top influence on where they decide to give, women in the same bracket most often cite the ability to make the greatest impact.

Moreover, younger women at the highest wealth levels are more likely than men to align their investments with their giving goals, thereby not only trying to increase their wealth, but also help others.

These are among the findings of a survey of 1,051 high-net-worth individuals (HNWIs) around the world by The Economist Intelligence Unit, commissioned by RBC Wealth Management.1

Taking the lead on legacy planning

As women’s wealth increases – 27 percent of women in our survey have US$5 million+ in investable assets vs. 22 percent of men – the more often they take control over their financial decisions.

“There are more female wealth creators [at the highest levels] than in the past, and within wealthy families overall, more women are taking the lead in terms of planning how the family's wealth is used, particularly in the long term,” says Catherine Grum, head of family office services at KPMG.

By taking control over their financial decisions, these women can better connect how they use their wealth to build their legacies. For many women in the survey, that means not only building strong relationships with family, but also placing more emphasis on helping friends and the world-at-large financially.

In addition, the survey finds giving shifts more towards charitable and community giving at the highest levels of wealth. While many still do give to family, it tends to be less general gifting and more for specific reasons such as paying for medical bills or funding a business start-up.

When speaking to clients, Grum notices women in particular “almost always comment on how they can manage to pass on enough wealth so their children have the world at their feet ... without having so much that they feel like they don’t need to do anything. Having that balance is key, and therefore they look at how they can balance giving to family and philanthropy.”

Wealth levels of EIU survey respondents

A positive convergence

From mentoring other aspiring female entrepreneurs to encouraging science, technology, engineering and math (STEM) education for young girls, women at the highest wealth levels are frequently using their resources to support gender equality.

“There’s a convergence of more women coming into the philanthropy space on their own as donors, and broader public awareness about the importance of giving to initiatives that support greater gender equality and supporting women and girls in general,” says Alisha Miranda, chief executive of philanthropy consultancy I.G. Advisors.

For example, Zhai Meiqing, a leading philanthropist and successful Chinese businesswoman who grew a furniture business into a multi-sector conglomerate, supports initiatives that provide practical opportunities for girls and women to reach their potential. Her foundation’s work has included building affordable housing for single mothers, establishing a venture fund for female entrepreneurs that provides interest-free micro-financing, and working with the Women’s Federation of Guangdong Province to establish child-friendly community centres focused on family education and childcare.

“Women invest and give as a point to demonstrate the social change they want to see in the world,” says Dr Sandip Lalli, president and CEO of the Calgary Chamber of Commerce. “It’s encouraging because now that kind of wealth is going to propel communities and society further.”

As wealth increases, more HNWIs take the lead on legacy planning

Percentage of each group who serve as the primary decision maker for legacy planning

Impact over structure

Not only are women doing more to help society as their wealth increases, but they are also investing time and thought into where their money will generate the most impact.

How the ways in which women give vary by wealth level

Percentage of each group who say the following is a top three way they structure their giving

“One of the biggest mistakes philanthropists of any size make is coming into a cause area fresh and thinking they’re the first or only ones to do it when often there are numerous partners they could be working with,” says Miranda.

Our research demonstrates women at the highest wealth levels do take a more thoughtful approach to where they can make the most impact. For example, 23 percent of women with US$5 million+ in assets say the ability to measure impact is a top influence on where they decide to give, compared with 11 percent of men in that bracket who feel the same.

Conclusion

As more women and younger people acquire more wealth, they are thinking about how they can make a positive societal impact more than ever before. In particular, women and the next generation are focused on collaborating with others to help more women and young girls have opportunities to lift themselves into better circumstances.


1From March to May 2018 The Economist Intelligence Unit (EIU), commissioned by RBC Wealth Management, undertook a study across Canada, China, Hong Kong, Singapore, the UK and US of 1,051 HNWIs with at least US$1 million in investable assets.

© The Economist Intelligence Unit Limited 2018. All rights reserved.

Royal Bank of Canada, The Economist Intelligence Unit, and their respective marks and logos used herein, are trademarks or registered trademarks of their respective companies. No part of this document may be reproduced or copied in any form or by any means without written permission from The Economist Intelligence Unit.

Disclaimer

The material herein is for informational purposes only and is not directed at, nor intended for distribution to or use by, any person or entity in any country where such distribution or use would be contrary to law or regulation or which would subject Royal Bank of Canada or its subsidiaries or constituent business units (including RBC Wealth Management) to any licensing or registration requirement within such country.

This is not intended to be either a specific offer by any Royal Bank of Canada entity to sell or provide, or a specific invitation to apply for, any particular financial account, product or service. Royal Bank of Canada does not offer accounts, products or services in jurisdictions where it is not permitted to do so, and therefore the RBC Wealth Management business is not available in all countries or markets.

The information contained herein is general in nature and is not intended, and should not be construed, as professional advice or opinion provided to the user, nor as a recommendation of any particular approach. Nothing in this material constitutes legal, accounting or tax advice and you are advised to seek independent legal, tax and accounting advice prior to acting upon anything contained in this material. Interest rates, market conditions, tax and legal rules and other important factors which will be pertinent to your circumstances are subject to change. This material does not purport to be a complete statement of the approaches or steps that may be appropriate for the user, does not take into account the user’s specific investment objectives or risk tolerance and is not intended to be an invitation to effect a securities transaction or to otherwise participate in any investment service.

The text of this document was originally written in English. Translations to languages other than English are provided as a convenience to our users. Royal Bank of Canada disclaims any responsibility for translation inaccuracies. The information provided herein is on an as-is basis. Royal Bank of Canada disclaims any and all warranties of any kind concerning any information provided in this report.

This publication has been issued by Royal Bank of Canada on behalf of certain RBC ® companies that form part of the international network of RBC Wealth Management. You should carefully read any risk warnings or regulatory disclosures in this publication or in any other literature accompanying this publication or transmitted to you by Royal Bank of Canada, its affiliates or subsidiaries.

The information contained in this report has been compiled by Royal Bank of Canada and/or its affiliates from sources believed to be reliable, but no representation or warranty, express or implied is made to its accuracy, completeness or correctness. All opinions and estimates contained in this report are judgments as of the date of this report, are subject to change without notice and are provided in good faith but without legal responsibility. This report is not an offer to sell or a solicitation of an offer to buy any securities. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Every province in Canada, state in the U.S. and most countries throughout the world have their own laws regulating the types of securities and other investment products which may be offered to their residents, as well as the process for doing so. As a result, any securities discussed in this report may not be eligible for sale in some jurisdictions. This report is not, and under no circumstances should be construed as, a solicitation to act as a securities broker or dealer in any jurisdiction by any person or company that is not legally permitted to carry on the business of a securities broker or dealer in that jurisdiction. Nothing in this report constitutes legal, accounting or tax advice or individually tailored investment advice.

This material is prepared for general circulation to clients, including clients who are affiliates of Royal Bank of Canada, and does not have regard to the particular circumstances or needs of any specific person who may read it. The investments or services contained in this report may not be suitable for you and it is recommended that you consult an independent investment advisor if you are in doubt about the suitability of such investments or services. To the full extent permitted by law neither Royal Bank of Canada nor any of its affiliates, nor any other person, accepts any liability whatsoever for any direct or consequential loss arising from any use of this report or the information contained herein. No matter contained in this document may be reproduced or copied by any means without the prior consent of Royal Bank of Canada.

Clients of United Kingdom companies may be entitled to compensation from the UK Financial Services Compensation Scheme if any of these entities cannot meet its obligations. This depends on the type of business and the circumstances of the claim. Most types of investment business are covered for up to a total of £85,000. The Channel Island subsidiaries are not covered by the UK Financial Services Compensation Scheme; the offices of Royal Bank of Canada (Channel Islands) Limited in Guernsey and Jersey are covered by the respective compensation schemes in these jurisdictions for deposit taking business only.


We want to talk about your financial future.