Why Women May Control the Next Generation of Finance

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2:53April Rudin:So women are controlling ever greater sums of money around the world, setting the stage for major shifts in wealth management and philanthropy. In the U.S. alone, McKinsey expects women to control $34 trillion, or roughly 38 percent of investable assets by 2030. That's close to double last year's total. The figure was just$7.3 trillion. That was 29 percent. That was about 10 years ago, Tim.

3:18Nick Rice:The worlds of finance, wealth management and banking are all recalibrating for this great wealth transfer. With more in our new weekly discussion on women, money, and power, where we explore the economic implications of these changes and how to navigate them, we welcome April Rudin, founder and CEO of The Rudin Group, and Nick Rice, director at Brunswick. They're the co-authors of the forthcoming book, Wealth Management with a Difference, Your Guide to Achieving Client, Generational, and Business Success. It comes out late next month. They both join us here in the studio. Welcome to both of you.

3:49Nick Rice:We've been talking about this great wealth transfer for quite a bit of time. I mean, purely demographics, when we think about aging baby boomers and then who ends up receiving those funds. I want to start with you, April, the economic implications of these changes and what it means for new trends when it comes to investing, saving and, of course, giving.

4:08April Rudin:Well, it's huge. It's as you said, it's the intersection of all of these different factors coming together. There's never been a better time to be in wealth management. I would say the opportunities for financial advisors and for all firms that are serving in financial services, that sector of women is gigantic because you have financial advisors that are retiring. You have women inheriting more money. It's actually more of a wealth transition we're going to talk about rather than a wealth transfer. It's actually vertical, right? Women live longer. And so before that wealth transfer has happened, there's going to be a wealth transition.

4:49April Rudin:Distinction. So I started my firm 17 years ago talking about the wealth transfer and it actually hasn't really happened. You still from those McKinsey stats, you have people still talking about it's going to happen. It's happening. Is it happening? And now and people were under the impression that the transfer was also going to go to Gen Z. Right. But actually, it's going to go to Gen X and Gen X are now in their 60s and approaching retirement themselves, some of them. So I think it's more complicated than what people think. And so it's important to pull it apart and understand more about what's happening.

5:23April Rudin:Nick, I want to bring you in. So how much do things change when it comes to the investing world and the approaches? Like how much is going to be different? Because, you know, it's interesting that, you know, we sometimes men versus women and the distinctions. But is it all that different?

5:37Nick Rice:Yes. So there's going to be significant change. I think all the data shows that women are very, very passionate about using their investments and their philanthropy to fulfill specific purposes and to ensure that they have impact in a way that might not have happened in the past, or they might not have had the tools to do that always in the past. There's been a strong trend towards philanthropy among older generations, but female clients, particularly the younger generation, are more focused on measuring that impact, generating that impact, and also making money through purpose-driven activities.

6:05Nick Rice:So on the impact side of things, where does that end up going? So it varies, right? So you can look at it through a sustainability framework. A lot of clients prefer to look at a sustainability framework, targeting things like the environment or social causes.

6:18April Rudin:I thought we stopped caring about that.

6:20Nick Rice:Well, some clients don't choose to look at it through a sustainability framework, right? It varies depending on the client. But a lot of clients target the same underlying causes, whether or not they use a sustainability framework. You can target healthcare as a client through your investments, through your philanthropy. You can use a sustainability framework to do that, or you cannot use a sustainability framework. There are various different ways of cutting the pie.

6:41April Rudin:I want to bring you in on the same thing. Like, you know, why is it so different? But we hear from Nick that, yes, it will be different. Also, to your point, I think sometimes the U.S. is very U.S.-centric. And whereas that might be true in the U.S., our book is for a global audience. And that has not died down in Europe and Asia. Impact investing, sustainability is really hot and is something very important. I love that you went there. We're just coming off the U.N. General Assembly, and we did a big broadcast last Wednesday from the Plaza. Bloomberg does a big event, a global forum. And I felt like most of who we talked to, a lot of European officials.

7:19April Rudin:And yes, talking about alternative energy, renewables, how it financially makes sense that nothing's changing. And that really struck me in those discussions.

7:28Nick Rice:Well, it struck us because here in the U.S., the changing administration has really changed the tone when it comes to renewables. And also when it comes to foreign aid and pretty much every guest we spoke to, Carol, at that event was talking about how to maximize the impact of foreign aid and how to maximize the return from renewables.

7:44April Rudin:Yeah, I think it's kind of fascinating. So that's one of the reasons why we went global on this book. And we spoke to 80 senior leaders across the world because more and more firms are global in nature and more and more people are mobile in nature. And so having a better understanding of what our world is and technology connecting us is truly important. And even visiting some of the headquarters of some of the firms, you can see a huge difference where some firms are very traditional in the way that they look. Other firms have a more sustainable approach, as Nick was saying. You see firms that have more green, more exposed brick.

8:21April Rudin:In London, they've purchased a building and have redone it, something we don't really see here in the U.S., where we're just going to knock the building down and build something back up again. but there's an effort to create sustainability and demonstrate it through their brand. What does this mean in terms of money flows? So we are Bloomberg, and that is something, whether it's a fund advisor or whatever, Tim and I constantly talk about where the money goes. So Nick, where does the money go potentially as we see this wealth transition? Where does it go? Is it greener, sustainable efforts? Is it more global efforts?

8:57April Rudin:How do you see it playing out?

8:59Nick Rice:I think alternatives are a big piece of this. We're seeing increasing capital flow towards alternative investments, specifically towards things like private markets, but also digital assets. Right. And we've seen the rise in vehicles that will enable that. Right. Be those through new types of vehicles that wealth management clients can more easily access or also increasingly through retirement plans. Right. We saw the executive orders the other week. That's an important part of it. Also, international is a very important part of it. I think people thought with deglobalization that it would just make people more domestic.

9:30Nick Rice:In reality, it makes your international footprint more complicated. And we're seeing a lot of wealth managers retool in order to account for that greater international footprint. April, I want to finish where we started with you. And you said that there's been no greater time to be in wealth management. If you would have told me 10, 15 years ago that that would be the case for 2025, I wouldn't have believed you because we saw the rise of robo-advisors, passive investing, the idea of setting it and forgetting it, which I thought millennials would be doing, make the argument and make the case that people are paying that higher fee to get that personalized advice.

10:02April Rudin:So it's really the confluence of all these different things happening. It's more and more advisors retiring. It's volatile markets. As the mother of two Gen Z kids, I'll tell you that they're more conservative than what people think. And I think they want to have bigger brands that they rely on. So I think there's an opportunity there. I think that there is a general need for more financial literacy and around that because in even for financial advisors, I was just going to add one more thing, which Nick and I always talk about. There's been a real shift in who is a financial advisor and how to recruit people into it.

10:43April Rudin:Only 15 % of the workforce course, is women. And traditionally, finance majors have been recruited. And now, not so much. All right. Yep. We have to leave it there. I hope we can continue in the future. April Rudin, of course, of the Rudin Group, Nick Rice of Brunswick. And check out their book, Wealth Management with a Difference. And also, we have a special event in London, Women, Money, and Power. Be sure to check it out.

11:34Nick Rice:Thank you. everyone. Learn more at business.optum.com. Hey, everyone. It's Cal Penn. I'm inviting you to join the best sounding book club you've ever heard with my podcast, Earsay, the Audible and iHeart Audiobook Club. Every episode, I nerd out with amazing guests and dive into the best new audiobooks available on Audible. It's the book club for your ears. Listen to Earsay, the Audible and iHeart Audiobook Club on the iHeartRadio app or wherever you get your podcasts.

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