Marriage was the only route to security and status for the heroines in Jane Austen’s novels. Austen was born a quarter of a millennium ago, and women’s lives have changed considerably. In fact, Dr. Eliza Filby, whose book Inheritocracy: It’s Time to Talk About the Bank of Mum and Dad became a Sunday Times best-seller after its publication in the UK last fall, recently told attendees at the Burgundy Asset Management Summit in Toronto that women are the biggest beneficiaries of the inheritocracy economy.
In an inheritocracy, extended familial financial support becomes necessary for gaining high-cost and high-reward professional degrees. While parental support for higher education is a boon for young men as well, it’s women who have been taking it up in greater numbers. According to a UNESCO 2023 report, women outnumber men in higher education globally, with 113 women per 100 men. Women currently outnumber men in the previously male-dominated professional programs of medicine, dentistry and veterinary. And the trend in differential growth in enrollment continues apace.
“I was first-generation in my family to go to university, and it was my father’s dream that as a father of three girls, we were all educated as much as possible. That’s where we were told opportunity and financial stability was,” said Filby. “By the age of 31, I had three degrees because I went to university and never left. I started to realize something quite disturbing: I was a lecturer at a King’s College in London, and had a part-time cleaning job because the academic wages did not pay what I needed to live in London. I was living in my parents’ second home, rent free, because I couldn’t have afforded to work at the college otherwise. I became acutely aware that among my friends who were succeeding, it was not because they were earning lots of money; it was because they had the safety net and then the springboard of Mom and Dad. And I was that person, too.”
You are who you marry
This “parental springboard” allows women to have higher lifetime earnings and potentially benefit from larger inheritances from baby boomer parents and/or grandparents who were able to grow wealth during bull markets. Stack assortative mating patterns into the mix—where people seek mates of equal or greater social status and wealth—and privilege compounds, creating greater socioeconomic inequality. “Monied, educated, high-earning millennials are coupling up with other monied, educated, high-earning millennials, reinforcing this privilege and merging two ‘Banks of Mom and Dad,’” said Filby.
Affluent women like Cher and Madonna can afford to choose their mates for their differentiated and desirable attributes. Meanwhile, the high-net-worth “salariat” are more likely to seek partners from similar socioeconomic circumstances—graduates marrying graduates—to achieve a wider financial moat. Marrying within one’s class is the hallmark of the aristocracy, intended to preserve social status and protect assets. Assortative mating in an inheritocracy widens social inequality. “A boss marrying his secretary technically helps reduce inequality, but when a lawyer marries a lawyer, it is a case of two members of the professional class combining forces,” she said.
Filby argues that as women gain greater financial security, what they look for in a mate changes. The pool of suitable partners gets smaller as one climbs the socioeconomic ladder, which can delay marriage—and bring fertility challenges. Like men, women may choose to delay marriage and child rearing until they are well established in their careers. By the time they are ready to raise a family, the limitations of human biology may make it harder to conceive or the couple may have fewer children than desired.
More financial independence, with limits
Women are not only bringing their own wealth into the marriage; they are also bringing the promise of parental gifts or a later inheritance. Parents and in-laws are more involved in supporting couples than ever before, in the form of housing and helping with their grandchildren. “If ever there was an appropriate time to call marriage a marriage market, it is today. And, mindful of what happened to their mothers after divorce or widowhood, women are being more assertive in marriage negotiations, asking tougher questions about money and security,” said Filby.
Millennial women have been conditioned to think that being … financially reliant on parents is a safer choice … than being financially reliant on a husband.
Dr. Eliza Filby
Historically, women’s financial security was tied to men—father, then husband. Consequently, even in affluent families, females were less likely than males to control finances and other key resources. Today, women are building their own wealth. According to a global survey of individuals with a net worth of more than $1 million conducted in 2018 by The Economist Intelligence Unit and sponsored by RBC Wealth Management, 32 per cent of millennial women millionaires (born between 1981 and 2000) had over $5 million or more in assets, compared to 22 per cent of boomer women (born between 1946 and 1964) surveyed. Globally, women’s share of the ultra-high-net-worth echelon rose from 6.5 per cent in 2016 to nearly 11 per cent in 2022, driven by inherited wealth and a small increase in self-made business owners. There are now more female billionaires than ever.
Women are also managing their own wealth. According to an Inheritocracy/YouGov survey, one-third of women said they would never open a joint savings account with their husbands. They are also more likely than men (24 per cent versus 16 per cent) to see their inheritance as theirs alone. “After years of being financially independent, millennial women have been conditioned to think that being either financially self-sufficient or financially reliant on parents is a safer choice and more enabling than being financially reliant on a husband or partner,” she added.
However, when it comes to inheritances, gender still plays a role. Sons usually receive more money and greater familial support in the form of living at home longer. “Sons are still more likely to inherit businesses or property, while daughters often inherit the role of carer, alongside financial duties,” said Filby. “This is beginning to shift, but not fast enough, especially amongst ultra-high-net-worth individuals. Differential longevity also plays a role: Women live longer, often alone in later life, and face higher costs. So, what looks like an ‘equal’ inheritance on paper doesn’t always translate into equality in practice.”
A role for family offices
To date, boomer women have been the biggest beneficiaries of the inheritocracy. Their greater longevity means the money goes sideways to them before going down to the next generation. Historically, widows have been the poorest members of society, but today it’s often women over 65 who are in their era of financial power. According to Filby, the biggest jump in entrepreneurship in any age group from 2007 to 2017 was women over 60.
With greater wealth comes greater familial power over the next two generations. A “Granny CEO” is no longer dependent on a male breadwinner. Boomer women spend, invest and view their wealth differently than boomer men do. “Women are often more likely to give during their lifetime, and they tend to care about where money is invested, especially when it comes to climate and community,” said Filby.
“Family offices have the chance to be more than money managers,” she added. “They can be facilitators of difficult but vital conversations. They can help families map not just assets but also roles, responsibilities and likely futures. They can encourage women and younger generations to take part in decision-making now, not just later. By guiding families to create charters around values and planning for the first months after a death, they help wealth become more than money. They help it become security, opportunity and connection across generations. Advisors who build relationships with the whole family, not just with ‘Dad,’ are far more likely to keep the connection across generations.”
Rita Silvan, CIM®, is an investing, personal finance and speech writer based in Toronto. She is the former editor-in-chief of ELLE Canada and Golden Girl Finance magazines. She is a regular columnist for Canadian Moneysaver Magazine, and her work has appeared in The Globe and Mail, Financial Post, RBC’s Inspired Investor, CFA Intitute’s Enterprising Investor, Benefits and Pensions Monitor, and AIMA Journal, among others. Her clients include Royal Bank of Canada, Penderfund Capital Management, ETF Capital Management, Manulife Financial and Tangerine Bank. She has appeared on BNN Bloomberg, CBC Newsworld, and BreakfastTV.
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