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We are at a historical turning point. As we stand on the cusp of the impending Great Wealth Transfer—we’re witnessing more than a mere change in asset distribution. We’re also experiencing a profound transformation in the very fabric of wealth management. Women are standing to inherit more than 60% of this $84 trillion windfall. However, the implications extend far beyond the mere accumulation of wealth.
This shift presents a special opportunity to redefine investment strategies, especially in supporting impact businesses and women owned businesses. Focusing on these areas can drive a comprehensive change in wealth management, planning, and utilization for social impact.
The Power of Female Investors in Impact Businesses
The rise of women successors in the biggest transfer of wealth in history is not a statistic; it’s a narrative change. With their increasing financial autonomy and leadership roles, women position themselves as champions of impact investments. These investments with social and environmental benefits alongside financial returns, harmonize with the values many women hold dear.
Values that most of the women hold onto include sustainability (e.g. carbon emissions through minimizing carbon footprint), social equality (e.g. employee engagement and fair wage practices), and ethical governance (e.g. board diversity and structures).
The growing inclination among women to invest with purpose can promote the funding and success of impact businesses. This trend not only diversifies the investment landscape but also ensures capital flow to ventures with commitment to build a better future.
The Evolving Values of Millennials and Women
The demographics of wealth are changing, and so are the values of its inheritors. Millennials, alongside their female counterparts of all generations, are placing increasing importance on social responsibility, sustainability, and ethical investment. This isn’t about doing good; it’s about aligning investment decisions with personal values. These factors are non-negotiable for a generation that grew up amidst the clarion calls of climate change, social inequality, and a desire for transparency.
Adapting Investment Strategies for Family Offices
For family offices, the traditional pillars of wealth management —preservation, growth, and succession— are also experiencing a shift. This shift requires adapting strategies that align with the values of sustainability and social responsibility not as a moral imperative but as a business one with a focus on preserving their legacy.
Family offices acknowledging this shift are positioning themselves as leaders not just in wealth management but in wealth leadership. Today, 22-30% of women globally hold family office leadership positions and will continue to grow as the great wealth transfer unfolds.
Real-world examples underscore this evolution. Consider the case of the Blue Haven Initiative, a U.S-based family office. The Blue Haven Initiative has transitioned its entire investment portfolio to impact investing, aiming to ‘put wealth to work for competitive returns.’ By adopting a global portfolio approach, this decision aligns with both the family’s values and the pursuit of “financial performance and public benefit”.
The Importance of Values Alignment
As we navigate this new era of wealth management, values alignment holds great importance. The future of wealth isn’t just about financial gain; it’s about leveraging wealth for a lasting, positive impact on society. For family offices, this means embracing change and understanding the unique perspectives and priorities of female successors and millennials. It also involves ensuring that investment strategies reflect the values of this new generation, while honoring the origin story of the family business.
The Great Wealth Transfer goes beyond asset transfer; it’s a chance to redefine wealth’s purpose and potential. By aligning values with investments, family offices can ensure not only the preservation of wealth but its evolution into a force for positive impact. In this new era, the legacy of wealth will be measured not only in financial terms but in the impact it has on the world. Equati is at the forefront of this change.
Equati is the first intelligent impact investing legacy platform for Family Offices. We use AI for value-aligned alternative investment strategies to accelerate returns, increase global impact, and to sustain wealth across generations.
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