Women in Australia are set to inherit $3.2 trillion in the largest intergenerational wealth transfer the country has ever seen.
It’s a staggering number that wealth management company JB Were’s latest report says is part of a significant evolution of the landscape of high-net-worth (HNW) women in Australia.
Looking closely at Australia’s growing cohort of HNW female investors, JBWere partnered with Core Data to conduct research that highlights women’s increasing influence and wealth management needs, as well as the challenges these women continue to face.
Women are accumulating their own assets and investments, with increased female participation in the workplace, higher educational attainment and a growing interest in entrepreneurship. At the same time, they’re benefiting from intergenerational wealth and Baby Boomer business transfers.
For the past decade, the number of HNW women in Australia has been steadily growing at a rate of 5.7 per cent per year, according to 2023 research from CoreData. This is close to twice the growth of male millionaires at 3.6 per cent per year.
More women are entering STEM-related higher education courses, offering women greater earning potential in their careers. And together with the gradual growth of women in leadership roles, the report says its expected the number of HNW women will continue to rise in the years ahead.
Female entrepreneurs are also growing three times faster than their male counterparts, and women now own one third of Australia’s small businesses.
Alongside self-created wealth, the $3.2 trillion that women in Australia are poised to inherit in the next decade will create a big impact on custodianship of existing wealth.
And for at least two decades post inheritance, the report projects that women will be in charge of the family finances as they outlive their partners. In the 70-plus age group, there are 16 per cent more females than males, which widens to 33 per cent for those over 80 years of age.
Not only do women live longer than men, but the report cites an “oldest daughter effect” when it comes to inheritance as well.
The research found control of the family finances at the point of wealth transfer is most likely to be managed by the oldest daughter in the family, who is also 50 per cent more likely to shoulder the burden of the family’s estate.
Divorce is another key piece to the puzzle as the HNW cohort is more likely to be over-represented in this legal process. Approximately 10,000 HNW couples will divide their assets each year, with an estimated $30 billion asset pool converting to roughly $15 billion in the hands of HNW women.
But despite these HNW women’s high-level of capability, financial literacy and high value portfolios, the report says these women still report barriers to engaging with financial service providers. The barriers range from increased scrutiny when applying for loans, to institutional representatives assuming they have no understanding of finance, and other discriminatory behaviour.
The research found HNW women want advisers to consider their specific needs, their expertise, engagement, their available time, their lifestyle, interests and family obligations. Several HNW women interviewed mentioned they used female advisers, indicating a possible preference for women among this cohort. However, women account for less than 21 per cent of financial advisors in Australia, according to 2023 CoreData research.
One HNW woman – a legal professional and not-for-profit board member– told researchers: “I’m looking for somebody who looks at the whole package. […] They have to look at who you are, what you’re doing in life and where you’re going. And not only obviously me, but how I exist in my marriage and what’s happening in the family.”