“For women, legacy often means more than passing wealth down to the next generation; it also means being capable of positively impacting the lives of others,” Marianna Mamou, head of “advice beyond investing” at UBS Global Wealth Management, told CNBC Make It.
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Men and women have very different approaches to money — and that affects how they pass on wealth to their children.
Many women look beyond their family when thinking about what to do with their wealth, according to a new report from UBS that compiled surveys and data from the Swiss Bank and other sources.
“For women, legacy often means more than passing wealth down to the next generation; it also means being capable of positively impacting the lives of others,” Marianna Mamou, head of “advice beyond investing” at UBS Global Wealth Management, told CNBC Make It.
For example, the way women invest their wealth is often aligned with their personal values or in service of causes. Those could be anything from supporting charities to helping their heirs start a business they believe in or purchase a home, the report says.
Women also view their wealth overall in a specific way according to the report.
“Women tend 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 and their loved ones over the long term,” it says.
How women pass on their wealth
Women also tackle questions about how to pass on their wealth to their heirs differently from men, the report noted.
As for the question of when to pass on wealth, the differences between men and women are especially pronounced, the report found, citing data from the 2022 UBS Investor Watch survey.
“More women prefer to wait and pass on wealth after their death as they don’t want their heirs to worry about their health. In addition, more women than men worry about disputes between heirs,” Mamou says.
For example, 44% of women are concerned about the latter point, compared to 37% of men.
“Another reason that women prefer to delay handover of wealth while they are alive is that they want to remain flexible,” Mamou adds. Sixty-three percent of women and 53% of men gave this reason in the UBS survey.
When it comes to arguments for passing on assets while they’re still alive, 66% of women say younger generations already need monetary support, compared to 61% of men. They are also slightly more motivated by educating heirs about handling wealth.
Men, on the other hand, are more likely to transfer money before their death for tax reasons (65% of men and 61% of women said this) or to watch their heirs make use of it.
Succession planning
The gender differences don’t stop there.
In addition to women being unsure about how much wealth they can pass on, the report found that one of the reasons they are hesitant to do so before they die is that they aren’t sure how.
“There is a gender gap in the understanding around succession planning,” the report concludes.
Getting expert advice — including on how to invest in a way that ensures wealth growth is balanced with values — and making plans sooner rather than later are therefore key, the report says.
One thing that might help with this is that women say they find it easier than men to talk about money with their families, according to UBS data. Such discussions around wealth can also help with concerns like conflicts around inheritance and financial skills, Mamou adds.
“Including younger generations in investment decisions should lead to a smoother transfer of wealth with fewer surprises. Furthermore, incorporating sustainable investing solutions can also be a great way to engage with, and bring in, the next generation,” she says.
“Investing together with the next generation provides a great opportunity to pass on the values and financial lessons that matter when the next generation comes of age.”
A final point the report makes is that women often outlive — and therefore inherit money from — men. That means they have more wealth to transfer to the next generation — making plans and conversations about this even more important.
