Family Wealth Report spoke to GenSpring executives Patricia Soldano and Carolann Grieve, co-chairs of the firm’s Women & Wealth Initiative, about some of the key themes flagged up in 2014.

Some 150 women recently gathered in South Carolina for GenSpring's 13th annual Women’s Retreat, uniting female clients ranging in age from 17 to 87 to discuss issues around preparing women for decisions on wealth management and the impact it will have - or is having - on their lives and family members.

Family Wealth Report spoke to GenSpring executives Patricia Soldano and Carolann Grieve, co-chairs of the firm’s Women & Wealth Initiative, about some of the key themes flagged up in 2014 and the topic of women in wealth management in general.

Given that women are set to control two-thirds of US consumer wealth within the next ten years, financial education tailored to this investor segment is a “critical component” of the role as a family office, Soldano said.

The concept is certainly not new to GenSpring - the first retreat having been held back in 1990 - but the event is an opportunity for the firm to focus on the emerging challenges that resonate with women - in a “welcoming environment.”

Many of the issues will always be critical - such as the importance of next-gen engagement and the role of women. But they are still very much high on the agenda, suggesting there is more scope for the industry to open up to these unique investor segments - particularly as the US continues its journey through the greatest transfer of wealth ever seen.

As an overview, GenSpring said five themes emerged during this year's retreat: the importance of effective family communication; enabling versus providing opportunity to next generation family members; the implications of equal versus unequal inheritance; best practices for communicating wealth transfer intentions; and the impact money has on relationships.

Lack of focus

“We think there has been a lack of focus for women inheriting or earning wealth, and while they need the same education as men, they may learn it a little differently,” Soldano said.

According to recent estimates from PricewaterhouseCoopers, some $41 trillion of wealth is currently moving down from the Baby Boomers to the millennium generation.

But going largely unnoticed is that this transfer of wealth is likely to go from husband to wife first, Carol Pepper of Pepper International said at the Family Wealth Report Summit this March.

“Mom is going to be the decision-maker for a while…we need to think about bringing in the wives of these patriarchs and getting them ready to be the matriarch of the family,” Pepper said.

Next gen

It has been widely acknowledged that young people - regardless of gender - “thrive on engagement.” Grieve said GenSpring is seeing more and more next-generation attendees at the Women’s Retreat (defined by the firm as those between the ages of 20 and 40). This year, 42 next-gen individuals took part - the largest the retreat has ever seen.

The fact that the share of next-gen participation has grown over the years supports the idea that individuals are increasingly recognizing the importance of making the next gen aware of the challenges that they may experience in inheriting wealth (and indeed next-gen individuals themselves.)

“One of the biggest questions we hear from clients is ‘how do I talk to my children about money’?” Grieve said. “We wanted to give individuals some suggestions on how to move the next generation from dependent to independent stewards of their wealth.”

Human, intellectual capital

She added: “If you don’t communicate your intentions, it will prevent the individuals from being prepared for knowing how to live their own lives and preparing their own wealth transfer intentions.”

“We believe that the only way to avoid the ‘shirtsleeves-to-shirtsleeves’ phenomenon is to not only focus on financial capital but on other forms of capital, including who the people are and what they know: human capital and intellectual capital,” Grieve said.

Soldano noted that women and men learn differently and show distinct behavioral and communication patterns when it comes to finance.

For example, in terms of investing, women have a tendency to hold their assets and are more disciplined. Indeed, four out of five women in relationships shy away from making investment decisions while men take the reins, something UBS described as “alarming” in a report released last month. However, the survey did also find that neither men nor women enjoy shouldering financial responsibilities alone (although women more likely to feel burdened by this.)

“I think that’s the makeup of women’s’ psyche in behavioral finance but also trust is a more important issue among women because they are more relationship-based,” Soldano said.

Highlighting this, she noted that 70 per cent of all widows change their advisor within the first year of their spouses’ death (source: a Cisco International Business Solutions Group study in 2012).

A male-dominated industry

Meanwhile, in an industry that is dominated primarily by men, Soldano noted that “women need to work with men because a lot of those advisors will be men.”

Women are “woefully underrepresented across the industry” - even though they account for nearly two-thirds of the US workforce, Pershing said last year in light of survey findings. The BNY Mellon firm argued that shifting demographics mean that old formulas for success no longer add up, but that women advisors can help unlock a variety of new market opportunities.

According to Soldano, things might be changing – albeit slowly.

“What is interesting – not at our retreat because it’s exclusive to women – but at conferences that are geared towards women, is that there are more men attending because they want to learn how to best communicate with their female clients,” she said.

Women may also be part of the solution to the industry’s highly talked-about talent shortage, or graying of its advisor population - but only if financial organizations learn how to recruit and retain them.