On International Women’s Day, UBS global wealth management’s chief investment office published a thematic report on women and legacy, focusing on how women investors define legacy, their concerns, how they can best allocate their resources, and how important it is to put a financial plan in place for the smooth transfer of wealth.
The report highlighted that more women favor investing in illiquid assets such as real estate compared with men. Speaking to this news publication on the findings, Marianna Mamou, head of advice beyond investing, said: “Women prefer to invest in more tangible assets which they are familiar with, like a home. They invest in a risk-averse fashion and are also more interested in investing in the artwork than men.”
According to the UBS Q2 2021 Investor Watch survey, 61% of women surveyed were interested in receiving advice on investing in illiquid assets compared with 50% of men.
Such findings are among several surveys and commentaries relating to how women handle financial and investment issues – sometimes in ways that push against settled images. A draft of reports has come out to coincide with International Women’s Day, March 8th.
The legacy strategy focuses on maximizing and preserving wealth for future generations. It helps investors understand how much they can devote to goals beyond their lifetime and the best way of achieving these goals. By separating legacy strategy resources from the rest of their portfolio, investors can invest them to maximize growth for future generations and for doing good.
According to UBS, women are inclined to perceive and value wealth mainly as a source of security. They tend to focus on being financially secure and able to afford a particular lifestyle for themselves but also for their loved ones over the long term.
Based on the firm’s research on endowment-style portfolios, its standard guidance for the legacy strategy is to allocate up to 40% to private markets, with research suggesting that real estate is one of women’s preferred asset classes. They are more comfortable using illiquidity in favor of investment returns.
“But women aren’t so well-prepared as men to leave an inheritance and have no plans. 55% of women do not have plans in place compared to 41% of men. Whilst 37% do not understand the rules around inheritance tax compared to 25% of men,” she said.
The UBS Investor Watch survey for 2022 also showed that 72% of women found the pandemic to be an opportunity to have more meaningful end-of-life conversations with their heirs, compared with 66% of men.
Data from the study also showed that 56% of women versus 47% of men do not know how much wealth they can pass on to the next generation, highlighting why advice and planning are essential. “Women value advice more than men and are more willing to have a financial advisor,” Mamou added.