How advisors can help underserved wealthy professional women

Professional women are making up the income gap between themselves and male partners, in some cases earning more now. But financial advisors are still not paying enough attention to them.

In a UBS study published in June on women who were the primary earners in their households,  57% said advisors and other financial professionals wrongly assumed their spouse or partner was the breadwinner. 

"We found that less than half of women breadwinners (44%) think the industry has treated them equally to men," UBS said in the report, one in the Swiss wirehouse's "Own Your Worth" series of studies examining women's wealth. The report surveyed 809 "high-earning" male and female American investors in January 2023; each respondent either had a personal annual income of at least $175,000, or was married to or living with a significant other who made that amount. Some 43% of the primary earner women had investable assets of at least $1 million. 

The missed opportunity for advisors is enormous, given women's rapidly growing wealth and earning power. Although the gender pay gap has persisted nationally, young professional women under 30 are earning the same or more than young men under 30 in 22 U.S. metropolitan areas including New York City — the biggest metro market for wealth management in the world — according to Pew Research Center data published in 2022. Pew also found that in 107 of 250 metro areas in its study, women under 30 had a wage of just 90% to 99% of what their young male peers made. 

Women also now outnumber men among college-educated workers, Pew said in September, likely setting them up for a lifetime earnings advantage over non-college educated members of the workforce. 

Pew also reported in April that the number of opposite-sex American households where husbands were the sole or primary breadwinners declined from 85% in 1972 to 55% in 2022; wives in that role grew from 5% to 16% in that same time period. Some 29% of marriages saw both spouses bring in about the same income in 2022. 

Women also stand to inherit big amounts as part of the ongoing great wealth transfer of an estimated $84 trillion in assets from baby boomers — around $73 trillion of which is expected to go to heirs by 2045, according to Cerulli Associates. McKinsey, which similarly expects around $30 trillion of that wealth transfer to change hands by 2030, said in a 2022 report that women in America were expected to receive "much of" that amount. 

Read more: American women and a $30 trillion opportunity for the wealth management industry

Women already control around a third of all U.S. household investable assets, around $12 trillion, McKinsey said. "As men pass, many will cede control of these assets to their female spouses, who tend to be both younger and longer lived," the firm noted in an earlier 2020 report. 

Yet the financial advice industry still has a long way to go as it crashes against these deadlines, judging from the UBS report. Some 64% of surveyed female breadwinner respondents said the financial services industry was patronizing to women, and 63% said they felt the industry catered mainly to men. 

Complementing these problems, women primary earners had lower confidence in themselves as financial decision-makers for the household compared to when men were the primary earners in the survey. Only 49% of women breadwinners said they preferred being the breadwinner compared to 87% of male breadwinners in the study — reflecting the pressure of "traditional gender roles" on those relationships, UBS said in the report. 

Additionally, "only about half of women breadwinners take the lead on financial responsibilities, ranging from daily expenses and bill paying, to longer-term decisions like investing and financial planning," UBS said. 

Those women attempted to play along with their expected roles. Half of the primary earning women said friends and family of the couples assumed the man made more, and the women never corrected them. They also often reported doing more chores at home, despite making more than their male partners. Male primary earners were far less likely to report engaging in housework and childcare. 

The UBS report found that primary breadwinner women in same-sex relationships were much more comfortable with calling the shots on household finances. Some 65% of those women said they were comfortable making more than their partners, 65% said they made financial decisions for the couple, and 70% considered themselves "highly knowledgeable about investing overall" — suggesting that in an absence of social pressures to conform to gender norms, women became more comfortable taking the lead. 

Read more: Why wealthy women lag behind male peers in estate planning

Yet here, too, the financial services industry fell short of adequately serving those women — 80% of those same-sex primary earner women felt the industry did not address their needs. 

Women primary earners in the survey overall said their top financial priorities were retirement planning (86%), followed by maintaining an emergency fund (74%), tax planning (70%), budgeting (68%) and long-term care planning (67%) — suggesting that advisors should focus on holistic financial planning in order to target wealthy working women. 

"By focusing on comprehensive planning, engaging women breadwinners as decision-makers, we can help them to steer their own paths to achieving the financial goals most important to them," Jason Chandler, the head of wealth management Americas at UBS, said in a press release on the study. 

"We have to really focus on educating the advisors" on the rising presence of women as wealthy professionals and potential clients in their own right, Michelle Barry, the president of Rockville, Maryland-based wealth management firm Grove Point Financial, said in an interview. Grove Point is an independent broker-dealer and registered investment advisor owned by Kestra Holdings, which is in the process of selling it to Atria Wealth Solutions. 

"People see it in their local communities; they see more and more women business owners, women executives," Barry said. "That's where the next generation of wealth may be." 

However, while Barry said she has seen evidence that women can be equally comfortable with male and female advisors, women as clients often require a different approach from an advisor who may be accustomed to working more with men. 

"They need to be listened to. They need to be brought into the conversation," Barry said "They may need to be explained things more thoroughly or more completely, because they're open to a lot of information."