Wealth managers need to take note of the behavior of widowed and divorced women who are taking control of their finances for the first time, according to a report from Spectrem Group.
About 41 per cent of first marriages end in divorce, and even more second and third marriages, the report says. About 7 per cent of millionaire households and 9 per cent of ultra high net worth households (with $5 million+) are divorced. Meanwhile, around 700,000 – 800,000 women are widowed each year, according to US Census data. Spectrem says around 7 per cent of millionaires are widows and 12 per cent of UHNW individuals.
The average age of millionaire widows is 70 and the average age of millionaire divorcees is 62. The average age of UHNW widows is 72, and for divorcees it’s 63. One thing the report notes is that most of these widows are retired, as are around three-quarters of UHNW divorcees. However, around half of millionaire divorcees are still in work.
The risk profile of an average male investor is quite similar to that of a divorced woman, the survey found. Slightly more men said they are “aggressive” while more divorced women are “moderate,” but the differences aren’t striking. However, widows expressed markedly more conservatism in their risk tolerance, with nearly a third saying they are conservative compared to just 15 per cent of men.
Again, wealthy individuals displayed similar attitudes when it came to involvement in their finances. Around 59 per cent of men like to be involved in the day-to-day management of their investors, compared to 47 per cent of divorced women, and 52 per cent of widows.
However, digging deeper, Spectrem found that the majority of widows were involved in day-to-day management because they are worried about their finances, not because they enjoy it.