MINNEAPOLIS – May 10, 2017 – Over the coming years, an estimated $3.2 trillion will transfer to the next generation in the U.S. Women, for a variety of factors, including longer life expectancy, will be the recipients of the majority of this wealth.
But despite their rising influence on family wealth, most high net worth women are not prepared either to give or receive this money, according to new global research by RBC Wealth Management conducted in collaboration with Scorpio Partnership.
Women play a critical decision-making role in family financial management, and are instrumental in deciding how to educate the next generation on money matters. Notably, 98 percent of female survey respondents report that they are either sole or joint decision-makers for daily banking; 84 percent are fully or partially responsible for the family investment portfolio.
However, of those surveyed, only 22 percent of women said they have a full wealth transfer strategy in place, compared to 30 percent of men.
“Women are becoming an economic powerhouse in the U.S.,” said Angie O’Leary, head of Wealth Planning at RBC Wealth Management – U.S. “A growing number are moving into the corporate executive ranks while others are starting their own businesses. Couple that trend with the fact that women, on average, live longer than men, and you can see how women are both creating and controlling more wealth than ever before. As such, it is important that they have wealth transfer discussions with their benefactors and have a solid wealth transfer plan in place.”
Women also play a critical role in the transfer of wealth and knowledge to the next generation. Survey respondents indicated they intend to start educating the next generation at an earlier age (generally two years earlier) than men across all areas of money management—day-to-day budgeting, investment strategy and wealth transfer.
“The most effective way to teach children is to start early and with the basics,” added O’Leary. “By bringing children into conversations about money and wealth at an early age, parents are actively instilling good financial values in their children, arming them with the mindset for financial success.”
The survey results also show that efforts to teach children about financial matters earlier are paying off. Millennial women in particular are benefiting from their mothers’ efforts. The research shows that more than half of female millennials describe themselves as confident in matters of wealth: 51 percent of under-35 women surveyed give themselves a rating of 7 or higher, meaning they are confident in their wealth knowledge.
The research – undertaken from June to August 2016 – includes responses from 1,752 high net worth women from the United States, Canada, and the United Kingdom, who have an average net worth of $4.4 million. These individuals included professionals, retirees and business owners, as well as givers and recipients of wealth.
Other key findings from the report include:
In January 2017, RBC Wealth Management released the 2017 Wealth Transfer Report, Lasting Legacy, which focused on wealth transfer trends in the U.S., Canada and the UK. In addition to the Women & Wealth Transfer report, RBC will release three additional research papers in spring 2017, which will delve further into the challenges and opportunities business owners, families and millennials face when it comes to inheritance. The full details of the report, and a survey which allows Americans to compare their answers to the findings, is available on www.RBCWealthManagement.com.
This study focuses on linear transfers, in which wealth is passed down from the older generation of parents, grandparents or elder family members, to the younger generation. The research does not explore multi-dimensional transfers of wealth between spouses, children or siblings.
In the United States, RBC Wealth Management operates as a division of RBC Capital Markets, LLC. Founded in 1909, RBC Capital Markets, LLC. is a member of the New York Stock Exchange, the Financial Industry Regulatory Authority, the Securities Investor Protection Corporation, and other major securities exchanges. RBC Wealth Management has $289 billion in total client assets with 1,800 financial advisors operating in 200 locations in 41 states.
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