What you probably already know: Women are becoming wealthier — millennial women, in fact, now control more assets than their male counterparts — yet remain concerned about their level of financial literacy and ability to care for themselves as they age. HSBC’s “The Fluency Gap in Women’s Wealth and Why the Advice Hasn’t Kept Up” finds that women are poised to control 40% of global wealth by 2030 in what’s been dubbed “The Great Wealth Transfer,” but many affluent women, while highly engaged in their own finances, fear they lack the support necessary to handle their money in the most responsible way.
Why it matters: Women for years have been told to embrace risk and become more financially confident, but the HSBC report (in tandem with market research firm Ipsos) says the problem is more structural than previously thought, something HBSC says challenges long-held assumptions about women and wealth. The so-called “financial fluency gap” (HSBC’s term) notes that only 32% of affluent women feel prepared for their own long-term care needs. Less than half feel supported by their financial adviser or institution, and nearly two-thirds plan for others and not just for themselves. Financial literacy and financial fluency are not the same: It’s one thing to understand the basics of money, but it’s another to know how to apply that to real-world decisions. “The problem isn’t women,” the report notes. “It’s advice that hasn’t kept up.”
What it means: The report suggests that financial advice often ignores the realities many women must deal with their entire lives, including support for children or aging parents. “Women are highly engaged in their financial lives, but engagement isn’t enough,” says Racquel Oden, head of international wealth management and private banking, U.S., at HSBC. “Financial fluency goes beyond financial literacy. It’s the ability to understand what to do and when to do it as life evolves.” Seven in 10 affluent women say financial education that reflects various of stages of the lives would improve the quality of their financial decision.
What happens next: Only about half of women express confidence in their current financial plan. When asked what they would do differently, most say they would have started saving for retirement earlier and investing sooner. Moving forward, HSBC suggests that financial planning “must move beyond static models and deliver guidance that evolves alongside the women they serve,” adding that affluent women should seek answers from financial partners who understand their unique needs. As Oden puts it: “What’s missing is fluency, a plan that translates knowledge into action. When women understand how the levers work together, confidence follows.”
