There are some striking figures, such as 70 per cent of widows leave their advisors within a year of their spouse's death. At a time of massive transfer of wealth, not just between generations, but between couples, there are many points to consider.

The article is written by Abbas Hashmi (pictured) who specializes in family office strategy and wealth management, and leads strategic initiatives for BAM Companies, a family-owned business in Indiana. Previously at Goldman Sachs Asset & Wealth Management in New York, Hashmi is a passionate AI advocate, leveraging technology, data analytics, behavioral finance, and digital innovation to streamline capital raising, particularly for introverted capital raisers and founders. (Here is a previous article from the same writer.)

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The wealth management industry faces a seismic shift in the next decade as $30 trillion in assets are set to be transferred to women. This "Great Wealth Transfer" represents both an unprecedented opportunity and a potential crisis for financial advisors who fail to adapt to female clients' unique needs and preferences.

The cost of ignoring half the market
The numbers are stark: up to 70 per cent of widows leave their financial advisors within a year of their spouse's death. This exodus isn't just a loss for individual advisors; it's a systemic failure that could cost the industry billions in assets under management.

Why are women leaving? The reasons are multifaceted:

-- 40 per cent of women say their advisors often ignore or dismiss their input; 
-- 62 per cent feel that their advisors don't understand their unique investment needs; and 
-- Many report feeling patronized or overlooked in meetings.

Women's wealth: A growing force
The financial power of women is undeniable:

-- Women control 33 per cent of global wealth, with half of this in the US; and
-- By 2030, American women are expected to control much of the $30 trillion in financial assets that Baby Boomers will possess.

Based on these figures, approximately $15 trillion will transfer directly to women in the US alone. This represents a massive shift in the financial landscape that wealth managers cannot ignore.

Unique investment approaches
Women investors differ from men in several key ways:

-- Risk management: Women tend to be more risk-averse, with 51 per cent waiting out market volatility compared with 43 per cent of men;

-- Performance: Despite lower risk tolerance, women often outperform men. Fidelity found that women's returns exceeded men's by 0.4 per cent annually; and

-- Sustainable investing: 70 per cent of women prioritize environmental, social, and governance (ESG) factors in their investments, compared with 58 per cent of men.

These differences in investment behavior can lead to significant long-term impacts. For instance, if we apply the 51 per cent risk-averse behavior to the expected $15 trillion transfer, about $7.65 trillion could be allocated to more conservative investment strategies. This shift could reshape market dynamics and demand new product offerings from wealth management firms.

The opportunity
For wealth managers willing to adapt, the potential is enormous. Here's what they need to do:

1. Develop empathy and active listening skills: Train advisors to understand and address the unique concerns of female clients; 

2. Provide comprehensive financial education: Offer workshops, seminars, and one-on-one sessions tailored to women's financial literacy needs; 

3. Offer diverse investment options: Expand portfolios to include more ESG-focused investments and risk-managed products; 

4. Create inclusive environments: Redesign office spaces and meeting protocols to ensure that women feel heard and valued; and

5. Diversify advisory teams: Increase the representation of women in wealth management roles. Currently, only 23 per cent of Certified Financial Planners are women.

The bottom line
The wealth management industry stands at a crossroads. Those who recognize and address the unique needs of female clients will not only retain assets but also tap into one of the most significant growth opportunities in financial services history. The cost of ignoring women is too high; the rewards for embracing them are immeasurable.

As the $30 trillion wealth transfer unfolds, wealth managers must ask themselves: Are we prepared to serve the financial needs of women, or are we at risk of becoming obsolete?