Women to hold $72 trillion of global wealth by 2020 as their influence over markets rises

It is critically important to consider women's approach to finances and their priorities, S&P Global says

Women holding parasols, look at an electronic board showing Japan's Nikkei average outside a brokerage in Tokyo, Japan. REUTERS/Toru Hanai/File Photo

Women will control up to $72 trillion of the world’s wealth by 2020, double the level of 2010, signalling that their influence over global financial markets and economies will continue to increase.

Women are more likely than men to consider a company's environmental and social impact when making investment or purchasing decisions, according to an S&P Global report titled The (Financial) Future is Female, which was released last Thursday. This means the increased focus by fund and asset managers' on environmental, social and governance issues will remain a priority.

“Women’s influence as investors in global financial markets – and, by extension, national economies – has grown substantially and will continue to do so,” the report said. “In this light, it’s critically important to consider the approach women take to their finances and the issues they care most about.”

Narrowing the economic gap and advancing gender equality would boost global growth by almost a third, Bank of America Merrill Lynch said on Thursday in a separate study about the impact of women on financial markets. A UBS survey of female investors showed they had control of day-to-day expenses, but deferred long-term financial decisions to their spouses, a trend that spanned from millennials to Baby Boomers.

S&P Global found that in all but one of the 11 countries it studied, women said they are less prepared than men to weather a financial setback, such as losing their job.

Higher numbers of women than men said they were in "fair" or "poor" financial shape. A higher proportion of women also said they lagged behind where they would like to be in terms of retirement planning.

“These differences cast light on the ways in which women often feel less financially secure and less optimistic about their economic futures,”
said Martina Cheung, president of S&P Global Market Intelligence.

“Paradoxically, women feel a greater sense of conviction when it comes to betting on themselves and using their economic strength to exercise their values.”

Understanding these differences and their causes can help countries and companies take practical steps towards the inclusive economic growth that will benefit everyone, Ms Cheung said.

S&P Global polled women and men in 11 countries with the largest stock markets, to gauge aspects of financial preparedness, investment behaviours and financial market sentiment.

While women’s participation in each of those markets varied, the report highlighted insights on cultural and economic factors representing women’s realities.

In the US, where women hold an estimated 42 per cent of wealth, the picture is bleak as two-thirds of millennial women said they are in “poor or fair” shape financially.

This helps explain why only about a quarter of American women invest directly in the financial markets or through mutual funds, despite 41 per cent saying now would be a good time to do so.

Within Europe’s wealthiest nations, including the UK, Germany, France and Switzerland, a higher percentage of women are worried about their financial future, including 88 per cent of women in France.

Among the Asian countries surveyed, women in South Korea and Japan proved the most pessimistic about their personal finances. However, about half of the women surveyed in China are financially stable enough to sustain themselves without their income for more than six months.

In all the markets surveyed, Asian women are most likely to keep their finances separate from their partners, indicating the growing autonomy and power they hold in the economy, the report said.

In India, economic confidence is reflected across genders, with 92 per cent of women and 88 per cent of men rating their financial situation as "excellent" or "fair", which is significantly higher than the global average of 79 per cent.

“Women continue to earn more seats at the proverbial table, pushing the global financial system to grow more inclusively,” S&P Global said.

“Our research shows that progress has been made and we expect it to continue because the [financial] future is female, and the future is now.”