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The Secret to Understanding Young High Net Worth Women's Investment Desires

By Alex Padalka September 28, 2018

Financial advisors who want to serve high net worth women, particularly those from Generation X and younger, will likely need to understand their particular goals when it comes to investing because they differ from men's goals and even from those of older wealthy women, according to a recent report from RBC Wealth Management.

For one thing, women overall are more interested in how their money can make a difference, according to a survey of 1,051 high net worth individuals worldwide conducted by RBC and the Economist Intelligence Unit.

When it comes to choosing where to allocate their charitable giving, men with $5 million or more in liquid assets predominantly cite tax benefits as the primary influencing factor, according to the survey. Women at that wealth level, however, most value their ability to make the biggest impact when it comes to charitable giving, RBC says.

Younger wealthy women are even more intent on making an impact. While only 33% of older wealthy women prefer to align spending with causes they’re passionate about, it rises to 43% for Gen X and millennial women, according to the survey. And 58% of younger women look at impact investing as a way of giving, compared to 38% of older women who do, RBC found. And in the U.S, 63% of younger women cite societal causes as more important than wealth accumulation, compared to 40% of older women, according to the survey.

Advisors, meanwhile, are very likely to work with a woman when it comes to substantial wealth. In the U.S., 60% of the women with assets of $5 million or more are the primary decision-makers on matters of financial planning, charitable giving and legacy planning, RBC found.