Widows have always had a reserved seat in the world of investments. The Scottish Widows investment fund was created in the early 19th century to assist women who lost their husbands in the Napoleonic wars and today manages more than 200 billion euros. In Spain, the dividends from the elevator company Zardoya were once known as “the widows’ dividend,” for being as reliable as leaving a pension.
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However, times have changed and what was once a seat is now a box. Widows no longer dress in black. Widows earn, as in Shakira’s song, and, in the case of the ultra-rich, they have become the object of desire for private banks specializing in large fortunes. They have already done the math and there is business. The latest to do so has been the Swiss bank UBS, which has long been tracking what has been called the “great wealth transfer,” that is, the immense amount of money that, in the form of inheritance, will pass from some hands to others in the coming years.
This group has a greater commitment to society and less risk propensity
The term “heredocracy” has already been coined, quantifying the enormous wealth accumulated by Western baby boomers. The bank’s calculations are that in two decades the greatest wealth transfer of all time will occur, amounting to 124 trillion dollars. The figure is not a translation error: millions of millions. The novelty lies in the importance of what the Swiss entity calls “horizontal inheritances,” those that pass to the spouse before the descendants.
“A substantial portion of wealth will first be transferred horizontally to surviving wives,” UBS states in a report on the phenomenon. Bankers do not overlook two details: the rich tend to live fewer years than their wives and usually pair with people a few years younger. Women “often marry older men, so they are expected to inherit and control a significant portion of assets before passing them on to the next generation,” the bank notes.
Consulting firm McKinsey estimates that by 2030 women in the United States will control 34 trillion dollars in investable assets, a figure more than four times higher than the 7.3 trillion a decade earlier. Wealth bankers should not overlook a new profile that forces them to change their way of working. Especially when widows owe them no loyalty.
McKinsey estimates that around 70% of women change wealth managers one year after their husband’s death, which offers opportunities to competitors and also shows that they want to do things their own way. “To remain relevant to them, wealth managers must adapt,” warns UBS.
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Beyond the wealthiest, the phenomenon extends to a large part of society. Women live, according to statistics, five years longer than men, to which is added that in heterosexual marriages they are on average two years younger than their husbands. This creates a seven-year gap and an active role for women in intragenerational inheritance, according to UBS’s conclusions.
The Swiss bank does not cite specific cases, although the best known in the billionaire pantheon is Laurene Powell Jobs, the widow of Steve Jobs, eight years younger than him. The Apple founder himself, from a different generation than the current tech oligarchs, requested that his fortune be distributed to philanthropic causes, which is what his widow has dedicated herself to.
Bankers attribute to these women a greater commitment to society and less risk propensity. “Women will play a central role in the great wealth transfer, both as immediate recipients of wealth and as long-term guardians for future generations,” says Marianna Mamou, the director of the work, in the UBS report.
Large banks are strengthening their private and wealth banking areas, where they achieve higher margins, often in connection with major family offices. Refining trends, this new profile of women now gains weight, who, according to a Fidelity study cited by UBS itself, is somewhat more conservative and concerned with preserving wealth. Widows, the bank indicates, have different values and expectations.
Their interest in philanthropy and responsible investments is also measured in percentages. 71% of women consider sustainability factors when investing, compared to 58% of men. “Nearly nine out of ten women believe they could do more to drive positive social change through investing and seven out of ten have increased their support for philanthropic causes in recent years,” the report states. “They are twice as likely as men to give importance to companies that include social and environmental responsibility factors,” it adds. Bankers are clear: black widows are also green.
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