International Women’s Day is on March 8, and it’s coming at a time when—elsewhere in North America, at least—the concept of diversity and equity in the workplace is under question, if not outright assault.
However, in the world of family offices, the reality is that making room for women at the head of the table is not just a matter of equity—it’s also a matter of acknowledging reality.
“Women are increasingly becoming the wealth creators and wealth inheritors. So, we are seeing more and more women in the family office space as the lead decision makers,” says Martha Simmons, co-chief operating officer at Forthlane Partners, a Toronto-based multi-family office that services ultra-high-net-worth clients.
One reason is the “great generational wealth transfer,” as it’s often referred to, which will see the children of baby boomers inherit trillions globally. According to Bloomberg, another fact is that women’s power is rising in family offices—part of a major gender shift in the leadership of business globally, even as men still hold the majority of C-suite jobs.
In the U.S., McKinsey & Co. expects women to control $34 trillion—or roughly 38 per cent— of investable assets by 2030, close to double that total in 2023. Overall, men will still oversee more investable assets, but the end of the decade will be the first time in history that women are close to controlling 40 per cent of the wealth.
In Canada, the numbers are similar in terms of percentages. Women will control close to $4 trillion in assets by 2028, almost double what they controlled in 2023, according to Mackenzie Private Wealth.
With the influx of money from generational wealth transfer, one thing that’s often overlooked is that the baby boomers’ children are often not the first step down on the ladder. As Aneil Gokhale, director of philanthropy at the Toronto Foundation, noted in a recent Canadian Family Office philanthropy panel discussion, the transfer of wealth often “goes from patriarch to matriarch and then to the next generation.”
Once women become the recipients of that wealth, they tend to treat it differently than men do. Karen Sparks, director of philanthropic advisory services at BMO Private Wealth, has noted that women tend to be more thoughtful in terms of planning longer term gifts and involving family members in philanthropic decisions. “They say they just don’t want to hand money over to their children,” says Sparks. “They want to teach their children the value of money and the value of being in a society like Canada.”
Unlike men, who tend to view prosperity as the goal, affluent women often see the accumulation of wealth as a means to accomplish a set of personal objectives, be it financial security for their family (a matter of importance to three-quarters of HNW women), the establishment of a business, or to support charities active in the local community—an objective of 72 per cent of female entrepreneurs, according to the Mackenzie study.
There are some pretty clear implications for advisors. The Mackenzie Private Wealth study points out that 80 per cent of Canadian women change their financial advisors within one year of the death of their partner. Why? For a lot of reasons—excessive use of jargon, a sense of being patronizing, an assumption by the advisor that all wealth came from the husband, and an unwillingness to spend time understanding their goals—that might be summed up under the heading “They just don’t get me.”
The ramifications for family offices are still playing out, but one clear requirement will be for advisors to shift their thinking when dealing with women decision-makers. “It’s important that clients feel that they can trust us,” Simmons says, “and share confidential information, experiences and life stories with us.”
Throughout the month of March, we will be covering the emerging realities and challenges of women in family offices today. Among other topics, our explore why women are taking a bigger seat at the table in family offices, whether business actually improves when there is more equal representation of men and women, and why it’s important to have female voices in family office advisory. We will also be profiling notable women in the family office ecosystem, including Stephanie Hickmott of Leith Wheeler and Laura Barclay of TD Wealth, along with a sit-down video interview with Martha Simmons, who talks about her journey into the family office space and the unique strengths that female advisors can bring to clients.
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