Boom in female wealth creation driven by business success

Business success is driving female wealth creation globally, resulting in a larger number of high net worth women

§ Inheritance and marriage are no longer lead sources of wealth

§ Women are often more thoughtful and purpose-driven when it comes to investment behaviour

A report published today by Barclays Wealth reveals that the affluence and influence of women is growing and is increasingly fuelled by their own individual enterprises – highlighting that the perception of inheritance and marriage as the lead sources of female wealth is out-dated.

In partnership with the Economist Intelligence Unit (EIU), a new global survey of 600 wealthy individuals[1] published in Barclays Wealth Insights: A Question of Gender, reveals that the vast majority of women are generating their wealth independently.

Wealth is largely driven from earnings and business ownership (83.9 per cent) or from personal investments (32.8 per cent). This compares to marriage (24.7 per cent), divorce (2.2 per cent) and inheritance (19.9 per cent), which the research shows are becoming less important sources of wealth.

Women’s growing economic power is reflected in the increase between 2006 and 2007 in the number of women featured on the Sunday Times Rich List, which grew from 81 to 92. The combined wealth of Britain’s richest women in 2007 is £33.27bn. Meanwhile, it is predicted that by 2020, female millionaires will outnumber male millionaires in the UK at 53 per cent. Behind the US, the UK has the highest proportion of women in managerial positions among OECD countries, with 117 female directors of FTSE 100 companies, while 77 per cent of those companies have at least one woman on their board.

Amy Nauiokas, Managing Director and Head of Brokerage at Barclays Wealth, said: “A Question of Gender presents a fascinating global picture of women and wealth trends – in particular the evidence which points to more women becoming independently wealthy via their job, ownership of a business, or from personal investment. While the more ‘traditional’ drivers of wealth still play a part, they are no longer the dominant forces they once were. While it is not necessarily a case of providing women with a different service or products, it is crucial that the wealth management industry understands the motivations and needs women have, and that a one size fits all approach to managing this increasingly influential audience may not work.”

The survey also reveals that women are less likely than men to invest in the riskier end of the financial spectrum, such as private equity (15 per cent for men versus 7.5 per cent for women), derivatives (13 per cent versus 7 per cent) or hedge funds (14 per cent versus 12 per cent).

The differences also extend to investing a windfall. When asked how they would choose to spend a cash windfall of £100,000 ($200,000), the majority of men said they would prefer to put the money in the stock market (18 per cent), but women have a greater propensity to avoid high risk, choosing instead to invest in their personal pension (13.5 per cent). This supports the view that women are more thoughtful and purpose-driven when it comes to investing, whereas men tend to look for income and growth.

Amy Nauiokas, concludes: “Women will alter their approach as they reach their goal and will often act to protect what it is they have built up. But equally, when they are in the mindset that ‘this is for investment and saving’ women are very diligent and plan well. They are also absolutely more disciplined in allocating a figure for the spending pot to enhance their lifestyle and enjoyment. ”