Over the past year, a popular topic of conversation, not to mention media chatter, has been women's economic power. From Barbie to Beyoncé, the general public was shocked by women’s ability to create (and to spend) such significant financial wealth. Just last month, a less recognizable name, Dr. Ruth Gottesman, made history by donating $1 billion to Einstein College of Medicine to make medical education tuition-free for students. While these accomplishments are incredibly impressive, the discussions happening around them beg the question: Why are we acting as though this is a new trend? Most importantly, what can we learn through these examples of women’s extraordinary power to earn, spend and give away significant wealth?
Those who are surprised by these powerhouse women haven’t been paying attention. Way back in the mid-2010s, Sylvia Ann Hewlett and Andrea Turner Moffit established how much influence women have over household finances, how ignored they are by many financial services firms and how much opportunity there is to serve them better as customers and investors. In their 2014 study, they found that women exercised decision-making control over 39% of U.S. investable assets (over $11 trillion), yet 67% felt misunderstood by their financial advisors, and 53% didn’t have an advisor at all. Fast forward, McKinsey forecasts women in the U.S. will control $30 trillion by 2030. The bottom line: there was an enormous opportunity to appeal to women and to harness the power of the female purse—and a decade later, there still is.
As women’s financial influence grows, everyone—from financial advisors to marketers, as well as parents, teachers and mentors – should be focused on harnessing the power of the female purse and giving our girls the tools they need to wield their financial power prudently in the future. When we recognize women as the influential economic decision-makers they are, we open up an entirely new world of opportunities for everyone.
Selling to Women: Stop Using the Word 'Empowering’
The Barbie-Beyonce-Swift frenzy of 2023 illuminates how underestimated women continue to be as economic decision-makers from Hollywood to Wall Street. Even The New York Times reported: “'Barbie’ once again disproved a stubborn Hollywood myth: that ‘girl’ movies—films made by women, starring women and aimed at women—are limited in their appeal.”
Perhaps this explains why so much marketing focused on women uses the word “empower,” meaning to give power or authority, to authorize or to permit. It’s as if certain products, brands or organizations believe that they’re enabling women, rather than recognizing that they already have power. The billion-dollar example that Dr. Gottesman provides demonstrates that women with financial capital have power – they don’t need a financial advisor, a bank or any other product to give them power or influence. Let’s move past empowerment. Instead, recognize that women already control significant capital, have diverse needs and opinions, and will gravitate to organizations and brands that spend the time to listen and understand their unique needs and interests.
Starting Early to Ensure Future Success
While it’s important to begin financial education early with both boys and girls, to ensure we’re setting future generations of women up for success, we have to set the tone for girls at a young age—through exposure and role modeling. Girls begin to lose confidence about topics like math and finance starting at age 8, and confidence plummets 30% by age 14. Before the drop-off in confidence happens, parents can help their daughters understand money and make good decisions about managing their own resources. By starting these discussions with girls at a young age, financial thinking will become second nature, instead of a daunting process.
Beyond introducing girls to financial planning, it’s essential for us to set the right example and model positive behavior. Girls tend to learn values and behaviors by watching their parents to a greater extent than boys. Especially for women who are mothers, grandmothers, aunts and mentors, make sure the young women in your life know that you engage with financial advisors, consider saving and investing choices carefully and make thoughtful decisions about charitable giving. Bring her into your decision-making process, where appropriate. By creating an environment where women are comfortable sitting at the table and subsequently sharing what they learned, girls can learn the importance of participating in household financial planning. After all, 90% of women will be the sole financial decision-makers in their households at some point in their life.
Seizing the Opportunity
Women will continue to be underestimated as economic decision-makers unless we change the narrative. Let’s elevate the stories of powerful women—not only Barbie and Beyonce and not only during Women’s History Month—but also, let’s lift up the examples of influential women in our own families and communities all year round to normalize women’s financial power. That’s how we harness the power of the purse.
Adrienne Penta is a principal of Private Banking and executive director of the Brown Brothers Harriman Center for Women & Wealth.