Women lead the charge in Australia’s $5 Trillion wealth transfer

Women are set to be the primary beneficiaries of Australia’s intergenerational wealth transfer, claiming about 65% of nearly $5 trillion by 2034, a groundbreaking report by JBWere published in the AFR reveals.

This shift is fueled by factors such as longevity—women generally outlive men—and evolving divorce outcomes.

Additionally, the 'older daughter effect' plays a significant role, with family financial reins often passing to the eldest daughter rather than the eldest son.

A new era of female financial empowerment

Maria Lykouras, JBWere's CEO, highlights that women are not just inheriting wealth; they’re actively creating it.

With $3.2 trillion expected to be managed by women over the next decade, we're witnessing a significant reshaping of Australia's financial landscape.

The AFR article notes that amidst persistent issues like the gender pay gap and retirement savings discrepancies, this wealth transfer offers a glimmer of hope.

The growth in female wealth is impressive: last year, the number of women becoming millionaires increased by 5.7%, outpacing the 3.6% growth among men.

Education plays a crucial role, with more women pursuing STEM courses, leading to better career opportunities.

The report also revealed that women tend to share their wealth with family during their lifetime, influencing how wealth is distributed.

Additionally, with women outliving their partners, they are more likely to control family finances for longer periods.

Divorces are also playing a crucial role in redistributing wealth.

With an increasing number of high-net-worth divorces, significant assets are moving into the hands of women.

A broader perspective on wealth

The AFR-published report which incorporates broader wealth elements like real estate and business, projects the transfer to reach $4.9 trillion.

It also noted that women are involved in wealth discussions, signifying a shift in wealth management dynamics.

Interestingly, the report challenges the stereotype of women being risk-averse investors.

Today’s affluent women are diversifying their portfolios and showing a keen interest in non-traditional assets.

The results point out that the pandemic has inspired many corporate women to venture into entrepreneurship.

The shift in wealth management to the eldest daughters is also notable, with these women increasingly playing active roles in family offices and investment decisions.

However, the real game changer lies in women using their wealth to empower new, female-led businesses addressing women's issues.

As property investment becomes more challenging, business creation is poised to be a key avenue for women's wealth accumulation.

About Leanne Jopson Leanne is National Director of Property Management at Metropole and a Property Professional in every sense of the word. With 20 years' experience in real estate, Leanne brings a wealth of knowledge and experience to maximise returns and minimise stress for their clients.