The UK has long had wealthy and influential women, but until fairly recently relatively few had achieved significant success as entrepreneurs. Today, there’s a large group of such women, everyone from Victoria Beckham and her eponymous fashion line to Martha Lane Fox, who founded and sold lastminute.com, to Kavita Oberoi, who founded her own IT and healthcare consulting firm. Worldwide, women are increasingly starting, owning and running businesses—yet the share of female high-net-worth individuals (HNWIs) in the UK who are doing so is notably large, according to a recent survey by The Economist Intelligence Unit (EIU). Indeed, 26% of such women we recently surveyed in the UK are business owners1, which is a higher share than women—or men, for that matter—in any surveyed region. This rise in HNW female entrepreneurs is leading, the survey suggests, to a redefinition of legacy and wealth among UK HNW business owners, a redefinition focused on a powerful link between doing well and doing good. The survey also suggests that such links will only intensify going forward.
These are among the findings of a survey commissioned by RBC Wealth Management and conducted by The EIU that captures the views of 1,051 HNWIs, 207 of whom are based in the UK, with at least US$1 million (£743,000) in investable assets
The survey shows a particularly large gap between the shares of UK women and men in their main working years2 who are business owners or entrepreneurs. Twenty-three percent of this group of women surveyed own businesses or are engaged in entrepreneurial endeavours, compared with just 11% of surveyed UK men of the same age. “More women are becoming wealthy through their own abilities,” says David Barks, research director, custom research, at Wealth-X, a global ultra-high-net-worth intelligence and data company. He adds that “wealth is still defined as mainly financial, but there are growing exceptions”.
Indeed, our survey shows that UK HNW male and female business owners differ in many ways on what their wealth means, with women more often emphasising social as well as economic good. Most of those we surveyed, for example, agree it’s important to protect the livelihood of their employees and the employees’ families, but a noticeably larger share of women than men say so: 73% compared with 68% of men.3 Furthermore, 65% of female business owners say it’s important their businesses have a positive economic impact on the communities in which they operate—maintaining jobs and contributing to local economic growth, for example—compared with 56% of men. And, most notable, 73% of female business owners say it’s important that their business make a positive charitable impact on the communities in which it operates, compared with only 48% of men.
All this aligns with significant differences in how UK HNW women and men define wealth itself. For example, 56% of HNW women in the UK think the ability to create change through charitable giving is becoming more important in defining wealth, compared with 38% of men; HNW women in the UK hold this view more often than women in other Western countries. And the younger they are, the more intensely they believe this: The share of younger UK HNW women who say the ability to create change through charitable giving is part of their definition of wealth is by far the highest share across generations and regions. Finally, and reinforcing their position as business owners, a higher share of UK HNW women than women or men in other regions include the ability to create change through traditional charitable giving or corporate giving as part of their definition of wealth.4
Investing in the community
Impact investing is increasingly important to HNWIs around the world. “What’s really interesting is that we’re seeing people really asking the mainstream managers looking after their portfolios if they are focused on promoting women on boards, on smart environmental risk management, on sustainable foods,” says Catherine Howarth, CEO of ShareAction, a London-based charity that promotes responsible investment with a focus on environmental, social and governance issues.
Our survey shows HNW women in the UK are more often than men focused on driving change by using their own businesses and investments to achieve social impact, including using impact investing as a form of giving. For example, 39% of younger women in the UK say they align their investments with giving goals, compared with 18% of UK men of the same age. And 31% of UK female business owners say increasing the charitable or economic impact of their business, or growing their business, is a top-three goal for their life as a whole, compared with 27% of other business owners globally.
Finding investments that serve both financial and social goals isn’t always straightforward, Mary Evans, a professor in the Department of Gender Studies at the London School of Economics, points out. But she sees more hope as more women run businesses. There has already been progress in areas such as environmental concerns and ethical clothes production with an increase in female leaders. But “in other contexts, ‘doing good’ is less marked,” she says. She adds, however, that “As more women become involved in owning or leading companies, it is possible that they will bring with them a greater sense of the particular issues and questions that often affect women more than men. Some examples are concerns that directly impact children in terms of the environment (for example, air pollution), food and food processing (additives and “hidden” sugar) and, of course, that perennial issue about the fit (or lack of) between paid work and the demands of care.”
Making an impact on the next generation
The influence of HNW women business owners in the UK seems likely to grow. Fully 90% of younger UK HNW women, and 80% of men, think women have more opportunity to own businesses than they did in previous generations. And those young women are confident they can meet their social goals: 72% say they will make more of an impact on the world with their wealth than prior generations—among the highest of any group surveyed.
In addition to having a positive effect on their communities, many women in the UK also want to make an impact on their children. In fact, 42% of HNW women business owners in the UK want to pass their businesses on to their families, compared with only 24% of men. And, not surprisingly, they’re just as keen to pass those businesses on to daughters as sons. “It used to be deemed the suitable thing to pass family businesses on to sons. Now it seems perfectly logical to pass them on to their daughters just as much,” notes Howarth. “I’d say that’s a broad reflection of a positive change in society.”
As the next generation of HNW women in the UK run businesses and acquire wealth, their twin goals of business success and social commitment seem likely to shift the focus of business in the UK from economic growth alone to using successful businesses to improve their local communities and the larger world. This shift seems likely to drive further changes in everything from how businesses are located, managed and financed to how and with whom UK HNW women want to manage their wealth to how and when they engage their children in both business and in giving back.
- It is important to note that the raw numbers of business owners of each gender in the survey were relatively low; the data reported on UK business owners by gender has a margin of error of 6.8 percentage points.
- People between the ages of 18 and 53, in Generation X or the Millennial generation.
- It’s also notable that 71% of UK HNW male and female business owners held this view, which is the highest share among business owners in any country surveyed.
- The comparisons are 18% in the UK, 4% in Asia, 11% in the U.S., 10% in Canada.
© 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.
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.
Royal Bank of Canada disclaims any and all warranties of any kind concerning any information provided in this report.