While passing wealth down to the next generation is a key objective of many families and investors, for women, legacy often also means being capable of positively impacting the lives of others and, thus, they have a tendency to invest with purpose, according to a recent report.
That purpose represents both their goals, values and intended impact on society, finds the Women and Investing – Planning for your Legacy report, published by UBS global wealth management’s chief investment office (GWM CIO), which also notes that 87% of women surveyed agree that money is a tool that can be used to help fulfil their purpose.
Female investors also appear more inclined than men to invest based on their values, the report points out. And, if women invested as much as men, there could be more than US$3.22 trillion of additional capital to invest globally, with over US$ 1.87 trillion flowing into more sustainable and impactful investing.
As well, more women (71%) take into account sustainable considerations when investing compared with men (58%); and nearly 9 in 10 women wish they could be doing more to create positive social change, with most of them wanting to give because they believe there is a great need and because they want to make a difference.
The pandemic was a catalyst for more women wanting to give to philanthropy – especially millennial women with 1 out of 2 wanting to make giving a bigger priority – shares the report, which finds 7 in 10 women having increased their philanthropic support over the past two years via dedicating time, money or expertise.
And – given gender differences in how legacy is defined, investment preferences and the approach to investing, and differences in longevity – the report suggests that attention needs to be given to how women can best allocate resources to achieve these multigenerational objectives.
Highlighting the importance of planning, 56% of women (versus 47 % of men), the report shares, do not know how much wealth they can pass on to the next generation. Hence, women tend to have very different wealth journeys than men.
Marianna Mamou, head of advice beyond investing at the bank’s GWM CIO, says: “Women are inclined to perceive and value wealth mainly as a source of security, and tend to focus on being financially secure and able to afford a certain lifestyle for themselves, but also for their loved ones over the long term.”