With women poised to command the lion’s share of Australia’s $4.9tr intergenerational wealth transfer by 2034, understanding the barriers and triggers for female-led investment is an economic imperative. Here, Maria Lykouras and Natalie Irvine of NAB Private Wealth take us behind the latest data on what high net worth women want.
Among the headlines of The Growth of Women and Wealth research paper released by JBWere earlier this year is that myriad factors are converging to bring around 65 per cent of the nation’s private wealth holdings under female control in the coming decade, even as the gender pay gap persists. While women’s selfcreated wealth is climbing as a result of greater workforce participation in higher-paying roles and growing entrepreneurship, their inherited wealth is also rising in line with divorce rates and family business transition. Approaching the HNW bracket, Australia’s contingent of female millionaires grew 5.7 per cent annually over the decade to October 2023 compared to 3.7 per cent for male millionaires.
The report, which synthesises interviews with a small sample set of high net worth (HNW) women and quantitative analysis by CoreData, identifies the ‘oldest daughter effect’ as a keystone in women’s financial dominance. JBWere Australia chief executive Maria Lykouras explains: “Statistics show that the burden of managing the family finances at a point of transfer is more likely to fall to the oldest daughter than other relatives or external service providers, and my own 25 years in wealth management certainly bears that out.” Firstborn sons are not only nine per cent less likely than first-born daughters to be handed the key to the safe, they are also far less likely to be put in charge of the day-to-day running of the estate. Whether this is because first daughters are considered the steadier or more empathetic custodians is difficult to prove, Lykouras says, but it highlights the need for fiscal preparedness across genders nonetheless. “A great many women approached me straight after this report came out to say that it chimes with their personal experience as an elder daughter, and that they’re now pushing to educate their own daughters early,” she adds.
One demographic factor that plays into this is women’s higher life expectancy—33 per cent more women than men live into their 80s—which sees many women taking on responsibilities for which they have neither the training nor advisory support. Add to this the 10,000 high and ultra-high net worth couples who legally divided their assets last year, and old-fashioned financial services rooted in patriarchy make less and less sense.
There will, however, remain clear differences between the financial needs of women and men while caregiving continues to fall largely to the former. NAB’s Natalie Irvine, who was recently named Female Private Banker of the Year in the Global Private Banking Innovation Awards for the second consecutive year, says HNW women tend to manage financial decisions in short, multitasked bursts because of their demanding schedules. “I don’t know any women who want to come into a bank between 9am and 5pm,” she explains, “but as a working mother of two children myself, I have no problem taking questions at school dropoff, and structure my day in such a way that clients know they can reach me once they finally sit down of an evening.” In contrast to the stuffy private banker image of old, Irvine says most conversations with her predominantly female client base happen via social media. She adds: “If we’re not a reflection of our clients and trying to understand their lifestyles, we don’t have a business.”
HUNGER FOR GROWTH
Arguably the most significant takeaway from JBWere’s report is that HNW women are just as risk tolerant as their male counterparts, with one in five identifying as ‘aggressive’ in their investment approach. And while HNW men are six per cent more likely than women to categorise their own knowledge of risk/return profiles as ‘good’, they are also six per cent more likely to dub it ‘poor’. Lykouras says: “Our findings challenge the long-held stereotype that women have more conservative risk appetites, and I think that’s partly because high net worth women diverge from the broader population and partly that we are seeing risk tolerance rise as younger, more financially sophisticated women start their investment journeys.”
She adds that financial service providers need to be mindful of unconscious bias that might lead them to steer female clients toward de-risking strategies more often than male clients. “Interviews revealed that some female investors feel like they’re being offered the vanilla and that they face more obstacles than men when it comes to accessing non-traditional assets, which is a big callout for wealth management professionals,” she continues. Though real estate was easily the most popular asset class for female HNW investors this time last year, around a quarter of those surveyed also held alternatives such as private equity and private debt, and even cryptocurrency.
As for taking risks in business, entrepreneurship is now growing three times faster among women than men. Lykouras says: “There are a lot of female founders out there trying to get incredible ideas off the ground, and a lot of them will tell you that they’re not getting the same level of financial support as male founders in the market.” One standout anecdote in the report highlights the experience of a C-suite executive who, despite her strong financial literacy and wealth management experience, faced more hurdles when renegotiating a mortgage than her equally qualified brother.
This increased scrutiny around everyday finance, let alone venture capital funding, indicates that female founders are missing out on critical opportunities for scaling. A dearth of female bankers and wealth advisers is seen as a contributor to this, together with a relative lack of role models and networking opportunities. “As a female leading a business, and one with a bit of a loud voice, I believe I can have an impact,” says Lykouras, citing the urgency of women’s financial empowerment. “I push through doors even if I’m uncomfortable doing so because that’s one of the things we have to do [as women] to get to the places that we want to go.”
Natalie Irvine agrees that swimming against the tide is key to breaking the systematic barriers that hinder the business and wealth goals of women. “When I started out I was told ‘you need to wear the blue suit, the heels, behave a certain way’, but that’s just performative,” she says. “One of my younger female clients recently said to me ‘you’re so not a banker’, and I think that’s because she can see that I’m authentic rather than slotting into a stereotype.” She adds that supporting the unique solutions and perspectives that female entrepreneurs bring to the business world is both professionally and personally rewarding.
PAYING IT FORWARD
It is hardly surprising that HNW women— having navigated their own hurdles to success —are 15 per cent more likely than men to be interested in investing for financial inclusion and empowerment. Lykouras says the link between purpose and performance has been cemented in recent years, with about one in five female respondents actively seeking investments with a social good element. “Women also tend to lead their family’s charitable giving,” she adds, “so the coming decade represents a tremendous opportunity for the philanthropic sector.”
As younger, socially conscious cohorts of women begin to inherit wealth, the cultural lag in Australia’s financial planning landscape will be increasingly evident. While several of the women interviewed in the JBWere study indicated a preference towards female advisers (as being more likely to understand their needs holistically), only one in five financial advisers is female. Lykouras says: “There is clear urgency for the wealth management industry to evolve to better support the capability and needs of high net worth women, because their financial decisions are going to have sizeable impacts across the business landscape as well as personal wealth.”
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