Women prioritising social media advice over professionals
Women are expected to inherit US$124 trillion through the intergenerational wealth transfer, but Capital Group has found they are twice as likely to rely on social media for advice over a financial adviser.
A survey of 600 high-net-worth individuals across Australia, Europe, Asia-Pacific and the US, produced by US$3 trillion investment manager Capital Group, has revealed a key gap between men and women and how they utilise and manage their inheritance.
Women allocate 26.4 per cent of their inheritance to investment, 14.3 per cent to savings and spend 15.4 per cent of it. This compares to men who invest 36.2 per cent, save 11.1 per cent of their inheritance and spend 11.3 per cent.
But despite being expected to receive a greater share of the intergenerational wealth transfer, women are twice as likely to seek investment guidance from social media and 'finfluencers' over a professional adviser.
Some 27 per cent of women said they would seek advice from these sources, compared to 15 per cent of men.
Speaking on the findings, Capital Group head of asset class services for Europe and Asia-Pacific, Alexandra Haggard, said it is important for advice firms to adjust to meet the needs of women in the “great wealth transfer”.
“Many women turn to social media and finfluencers for financial guidance, but as their financial needs grow more complex, professional advice becomes more crucial. As the ‘great wealth transfer’ unfolds, the wealth management industry must adapt to the rising influence of women in wealth,” Haggard said.
“Now is the time for them to take control of their financial future. Our research shows that while many women save more and invest less, some later regret not investing more of their inheritance. The good news is, it is never too late to start.”
One factor that may be deterring women from seeking professional advice is the cost as Fidelity found women are more concerned about the fees and charges on investments than men. Others were concerned about finding an adviser they felt they could trust or one who could speak to their level of financial understanding.
Research by Capital Group and CoreData earlier this year found Australians were especially “hands off” with their inheritance compared to other markets globally. While 79 per cent globally said they would leave no specific wish on how inheritance must be used, this rose to 92 per cent in Australia.
As a result, much of Australian inheritance is sitting “dormant”, the firm said, with only 29 per cent having invested it in mutual funds and 33 per cent invested it in their superannuation.
AUTHOR
Shy-Ann Arkinstall
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