As we stand on the cusp of one of the most significant financial shifts in history, the impending Great Wealth Transfer, we’re not just witnessing a change in the distribution of assets but a profound transformation in the very fabric of wealth management.
While women are poised to inherit more than 60% of this $84 trillion windfall, the implications extend far beyond the mere accumulation of wealth. This shift offers a unique opportunity to redefine investment strategies, particularly in fostering support for impact businesses and female-led ventures. By focusing on these areas, we can catalyse a comprehensive change in how wealth is managed, prioritised, and utilised for societal good.
The Changing Demographics of Wealth Inheritance. The Power of Female Investment in Impact Businesses
The rise of female beneficiaries in the Great Wealth Transfer is not just a statistic; it’s a narrative change. Women, with their increasing financial autonomy and leadership roles, are uniquely positioned to champion impact investments. These investments, designed to generate social and environmental benefits alongside financial returns, align closely with the values many women hold dear, include: sustainability (e.g. carbon emissions through minimising carbon footprint), social equity (e.g. employee engagement and fair wage practices), and ethical governance (e.g. board diversity and structures).
The growing inclination among women to invest with purpose can significantly accelerate the funding and success of impact businesses. This trend not only diversifies the investment landscape but also ensures that capital flows towards ventures that are committed to building a better future.
The Evolving Values of Millennials and Women
The demographics of wealth are changing, and so are the values of its inheritors. Millennials, alongside their female counterparts of all generations, are increasingly prioritising social responsibility, sustainability, and ethical investment. This isn’t just about doing good; it’s about aligning investments with personal values. For a generation that grew up amidst the clarion calls of climate change, social inequality, and a desire for transparency, these factors are non-negotiable.
Adapting Strategies for Family Offices
For Family Offices, the traditional pillars of wealth management—preservation, growth, and succession—are also experiencing a shift. This shift requires adapting strategies to align with the values of sustainability and social responsibility as not just a moral imperative but a business one with a focus on keeping their legacy alive. Family Offices that recognize this shift are finding themselves at the forefront of not just wealth management but wealth leadership. Today, 22-30% of women globally; hold Family Office leadership positions and will continue to grow as the great wealth transfer unfolds.
Real-world examples underscore this evolution. Consider the case of the Blue Have Initiative, a U.S-based Family Office that shifted a 100% of its portfolio to impact investing with a focus on ‘putting wealth to work for competitive returns.’ Focusing on a global portfolio approach, this move has not only aligned with the family’s values but aligning “financial performance and public benefit.”
The Importance of Values Alignment
As we navigate this new era of wealth management, the importance of values alignment cannot be overstated. The future of wealth isn’t just about financial gain; it’s about leveraging wealth for a lasting, positive impact on society. For Family Offices, this means embracing change, understanding the unique perspectives and priorities of female beneficiaries and millennials, and ensuring that investment strategies reflect the values of this new generation, while honouring the origin story of the family business.
The Great Wealth Transfer is more than a transfer of assets; it’s an opportunity to redefine the purpose and potential of wealth. By aligning values with investments, Family Offices can ensure not only the preservation of wealth but its evolution into a force for positive change. In this new era, the legacy of wealth will be measured not just in financial terms but in the impact it has on the world. Equati is at the forefront of this change.
Equati is the first intelligent impact investing legacy platform for Family Offices. We harness AI for value-aligned alternative investment strategies that accelerate returns, increase global impact, and sustain wealth across generations.
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