Why Women's Wealth Is Poised to Surge

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2:27Jaime Magyera:Well, Wall Street has spent years preparing for 105 trillion to pass from elderly parents to their kids, but a different kind of wealth transfer is already underway. We talked about this a little bit yesterday, Matt. More than a dozen women in the world's 500 richest people have become billionaires after the death of a spouse. So watch it, guys. No, I'm just kidding. It's the highest number ever. But it makes sense, because men naturally die at an earlier age than women. I didn't mean anything sketchy there. If you marry a woman who is your age, which I guess is not so normal among the ultra wealthy, you're likely to die before her.

3:01Jaime Magyera:Yeah, it's just logical. And people have reported on this, so it's nothing crazy like a bad murder series or something. Did you see what Stephen Colbert said? What did he say? He said, if his wife dies, he's going within a month because he can't imagine life without her. I think that's probably also something that happens quite often. I think my husband would do the same thing. But let's talk about it because there is this incredible wealth transfer and also wealth concentration when it comes to women. So let's get into it. In this week's Women, Money, and Power, we're exploring how this shift is creating huge implications for how vast sums of money are invested, philanthropy, and the way that wealth is passed on to the next generation.

3:39Jaime Magyera:Back with us is Jamie Majira. She is head of U.S. Wealth Advisory and head of retirement at Black Rock. It's the world's largest asset manager. They notched a record$13.5 trillion in assets. It's up from a million when we last talked in June, and we got the figure when BlackRock reported. I don't know that I said your name correctly. Majera. Majera. Majera. Okay. It was great. It's pretty crazy Tuesday. Majera. Just like it. I really like Jamie, so I want to get it right. Great to talk with you. How are you? Great. It's really good to be back with you. Well, you know, we are talking about the environment generally, so let's start there.

4:12Jaime Magyera:I know we did that over the summer when we talked, because BlackRock just sees so much in terms of the funds it oversees and the flows. And the flows continue to grow, but that doesn't mean the flows are always going in the same places. What can you give us insight in terms of where money is going and where money is going out of? Yeah, so first of all, excellent to be here. And you started by talking about flows. I'm gonna take a gender perspective on flows. And talk to you a little bit about where we see money going globally with women. And so women more and more are earning wealth, they're acquiring wealth, they're owning wealth, They're playing a larger role in capital markets.

4:48They are investing and benefiting from these capital markets. And we think there's no better sign of hope in the future than having people invest and grow along the capital markets.

4:56Jaime Magyera:Is it because they're earning it themselves and they're having some say? Or is it also in terms of couples, because they are often breadwinners as well, that they also have a say at the table? Yeah, so it's both, right? So when you think about women, women are more often now becoming breadwinners, primary breadwinners quite often. They're also contributing to household along with their spouses. um they're earning more money but they're also acquiring and you mentioned the wealth transfer you know we think about that in two ways there's the intergenerational wealth transfer where they're gaining assets maybe from their parents as they pass away but the more interesting one is this horizontal transfer right so if a spouse um passes away or if if there's a divorce women are acquiring assets in that way and they need financial advisors to help they're reshaping the industry and women have just not been served um in the way they need to be served in the past think about that, right, with Melinda Gates.

5:46Jaime Magyera:We think about it with, you know, Jeff Bezos. No one died in the Gates. No, but I'm just saying there was a big divorce. Oh, I got you. You had significant players, certainly in wealth overall, but also in philanthropy. Yes. Yes. Actually, Cerulli estimates that globally, one hundred twenty four trillion dollars will change hands in this silver tsunami. And then the and then the current forecasts are that fifty four trillion will be passed to spouses first before it goes down another generation so 40 of those spousal transfers will be to women so this is what sally krauchek calls the feminization of wealth and the idea is that when or the important idea i think here for for you for your industry is that when women get hold of this money they often don't stick with their same uh wealth managers they often say you know what i'm gonna go with someone else now so uh what do you do if you want to get hold of a piece of that pie.

6:44Yeah. So maybe I might even just dimensionalize what you mentioned, because I think about it in percentages. So today, let's call it women responsible and controlling 30 % of the world's wealth. That will be 50 % by 2030. That will be 70 % by 2070. So these are big numbers, big numbers. And women, as you say, they do things differently, right? And they want to do things differently. And oftentimes when they're getting a hold of this wealth, right? When wealth is passing to them, either through their parents and family or through their spouses, they want to do it differently. They want to be served differently.

7:1570 % of women leave their husband's financial advisor after a divorce or a death within one year. 70%. Why is that? Because they oftentimes felt not heard, not part of the conversation, not at the table and making decisions. You know, there's a lot of misconceptions around women, right? People think women aren't engaged with finances. Just not true. A third of U.S. households have women as the primary financial decision maker. People think women or call women perhaps a bit risk averse.

7:45Jaime Magyera:Well, that's what I wanted to ask you. Are women risk averse? Like, give me an idea when they, were you talking about investments? I mean, we've been thinking about the AI trade or private assets. Are they risk averse? So we did a study to make generalizations, but I'm curious if there are. So, okay. So not a monolith, right? Women are very different. All my friends are different than me. We all do different things and need different things. But generally speaking, we did a study with 2 ,500 female investors. When we talked to them about their risk tolerance, the majority of them were actually moderate to aggressive because they saw the power of not just gaining wealth through working or through transition, but actually gaining wealth through the capital markets, right?

8:26Investing in items that will, and securities and portfolios that will actually help them grow their portfolio. Private markets is a great example. Again, for a financial advisor to play that role and help and coach and guide a woman and how she thinks about her portfolio across public and private. Last time we were together, we talked about direct indexing and the role of taxes or women oftentimes want to. You're laughing. Gets me excited, direct indexing. Yeah, I love it. You know what? I anchored the ETF show for a long time and that's a big part of that discussion as well. You know what? It's not just women.

8:59Obviously, kids are going to get hold of a lot of this money. And I think, I'm not sure about women, but I know with younger people, they want to do more impact investing than their parents did or their grandparents did. So is that also a key to try? Because I'm thinking from the perspective of a wealth manager who wants more business. So what I need to do is say, hey, I can I can set up some direct indexing for you and I can help you make an impact with the money you invest. It's not just to make more money. You're also going to change some part of the world that you want to. Is that the case?

9:31It is. And I like to use the word purpose because actually impact has many different meetings. And so if I'm a financial advisor and I'm working with a younger client or a woman, I'm going to be talking to them, by the way, men too, right? It's not just about the impact you're having. You could invest in a way that maybe aligns with your values. Maybe you have certain values that are important to you to hold in that portfolio. I love motorcycles. So I would want to buy, you know, Ducati stock.

9:56Jaime Magyera:But, you know, I often wonder about that because, you know, if you care about the environment, but if an investment doesn't pay, do people, are people doing that because they believe in it, but it may not return as much as something else? I'm going to give you an answer that will be terribly unfulfilling. It depends. Okay. Right. So there are people, and by the way, let's step away from the portfolio for a moment and say, what about philanthropy? This is where I come back to purpose, right? People are looking to put their money to good cause and that might be philanthropic. It might be impact in their portfolio.

10:28It might be aligning with the values I have. It might also be sending my children to school or helping my elderly parents right or starting a new business right how about that for purpose or shielding your money from taxes right i mean um i guess i'd be willing to take somewhat of a loss uh by putting my money into a philanthropic vehicle um especially if it's compared to a much bigger loss by giving it away to uncle sam and state and local uh and federal taxes yeah and again that's where you don't look at things in a vacuum you have to look at them right overall holistic wealth planning and again the role of a financial advisor is critical there

11:04Jaime Magyera:um gotta ask you just in general when you look at this environment and we talk a lot about a bubble right now i don't know what is what is your take on it what are you or what are the conversations you're having with clients about how they feel about are they a little nervous yeah about that trade yeah we talk about i mean we talk to clients advisors and clients institutions globally all the time. Look, the markets are the markets and there are long-term investors that need to just keep staying with the markets. We talk about it's not time in the market or timing the markets, it's time in the markets.

11:36The other thing though is you just have to acknowledge that there's uncertainty out there, right? There is volatility. There are things going on in the markets that, again, everyday people, let's take it to America and Americans, everyday people need professional advice. They need someone they can trust that will help them navigate that through professionally managed solutions or through advice. But there is uncertainty out there. But again, we come back to it's time in the market, not timing the market.

12:02Jaime Magyera:20 seconds, Jamie. I mean, are more people feeling comfortable putting money to work? Are they after kind of a nice bounce from the April lows? Or they're like, I'm good. I'm done. I want to be a little bit more conservative just quickly. No, we are seeing flows into portfolios in ways that are across. As I said, BlackRock was up a trillion dollars since the summer we talked. We are having the best conversations we have ever been having with financial advisors, institutions, and wealth managers across the world. People are very interested. Interested. Okay, good. Jamie, thank you so much. So glad we got some time.

12:34Jaime Magyera:Jamie Majera, she's head of U.S. Wealth Advisory, head of retirement over at BlackRock, joining us here in studio.

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