The biggest trend emerging in the investment world is “women investing in women investing in women,” according to a UBS financial advisor.
Jill Faherty Lloyd said a growing number of women she sees are “angel investing” — expressing social values by investing in private venture markets that invest in products and services that solve issues that matter to women. Women often use their LinkedIn profiles to amplify those interests and to attract deal flow.
“They want to be in a community of other women who are making similar decisions,” Lloyd said.
Lloyd was among several financial advisors who spoke at a roundtable this week to release UBS Global Wealth Management’s report, “Own Your Worth Report: Women on Purpose.”
The report notes that, as of 2020, U.S. women controlled $11 trillion, about one-third of financial assets. That number is projected to reach $30 trillion by 2030.
Kick-In-The-Pants Decade
The century pandemic that opened the decade is poised to accelerate that trend, according to the report. Covid-19 has killed more than 1 million Americans, double the Spanish flu 100 years ago. Public health pleas to hunker down, work from home and avoid social outings meant lots of confined time with family, which led many to realign personal values and priorities. Women clients more often joined the conversations with the family financial adviser that they previously deferred to husbands, said the panel that included Angie Newman and Stephen LaFata.
UBS surveyed 1,400 women clients and learned that seven in 10 increased philanthropic spending during the past two years. Even though about half of them said they still deferred decisions about family investments to husbands, 90% of the women said they’re the driving force in charitable giving.
“Many times these women have foundations or donor advisements, and this is an appropriate place for those asset classes to lie, because they’re tax efficient and have longer-term time horizons,” Lloyd said.
“These female investors are really looking for sustainable solutions, and they’re particularly interested in supporting female entrepreneurs. They’re investing with a gender lens, and it’s not lost on them that female founders receive a meager 2% of venture capital money.
“Most women investors, when they become aware of this inequity in percentage of dollars, are determined to change that equation. It has become this idea within the venture capital world to have women investing in women investing in women. So, women investors are investing in women venture capitalists who are investing in women entrepreneurs. That is the biggest trend that I’m seeing right now.”
Not Good Enough
Still, said Lloyd, who recently attended a women venture capital summit, the venture funds run by women are in their first and second vintage, so they’re not large enough yet to be on many platforms. The goal is to grow them so large investment houses will offer them to the broad client base.
Although 79% of women surveyed said they value ESG investing (in environmental, social and governance support) — and 3 in 4 said they expect ESG investments to have as good or better returns than traditional products — only 47% actually have these investments in their household portfolios.
“The numbers aren’t good enough,” said Carey Shuffman, who led the roundtable as head of the Women’s Strategic Client Segment. “They’re going up, but they’re not going up enough.“
Women still earn just 82 cents of the dollar men make, and the pandemic hurt women in the workforce most, Shuffman said. Women already were leaving the workforce with 30% less retirement savings and less control of decisions that drive their retirement.
“But it’s not just the women who are wealthy who are engaging now,” she said. “We need to keep talking about it.”
UBS Group AG is a multinational investment bank and financial services company founded and based in Switzerland. UBS surveyed 1,400 women investors between Jan. 24 and Feb. 4. Those age 25-30 had at least $250,000 in investable assets, 31-39 at least $500,000, and 40 and older at least $1 million.
Linda Hildebrand is a longtime newspaper editor and consumer-action reporter.