There’s a transfer of wealth taking place in the United States and it spans generations. More than 20 percent of the U.S. population belongs to the Baby Boomer generation, which controls more than 50 percent of the household wealth in the country and – as time goes on – will have a majority population of women.

As more women become the financial leaders of their family or inherit responsibility for their family wealth, much of the trillions of dollars of investable assets in the United States will be controlled by women. As that wealth transfer takes place, women are navigating an environment that has traditionally been controlled by men.

“There is this pervasive yet erroneous notion that managing family finances and financial relationships are roles primarily for men,” said Carole Brown, head of PNC Asset Management Group. “Those assumptions have always been inaccurate. And as more women assume the role of financial decisionmaker in their households, it’s critical the wealth management industry adapts to these changing demographics.”

Despite those changing demographics and strides made in the wealth management industry, women still face an uneven financial playing field for several key reasons.

Income and wages

According to the US Department of Labor, women working full time are paid on average just 83.7 percent of what men are paid. The cumulative effect of that gap over time means that it would take women 257 years to catch up to men economically according to a 2020 report from the World Economic Forum. Additionally, the difference in wages means less accumulated wealth and investable assets over time for women.

In 2021, PNC launched Project 257 to address some of the key drivers of the economic gender gap including unequal access to credit, underrepresentation in the workforce and to serve as a role model for better wage equality.

“Women and businesses alike have made tremendous progress on closing the economic and compensation gender gaps, but there’s still plenty of work to do,” said Brown.

Wealth and Assets

Wages and income are only part of the larger financial gap that women face – owned assets and total wealth also show a disparity. According to a report by the Federal Reserve Bank of St. Louis, families headed by women have 55 cents in median wealth for every dollar of wealth owned by families headed by men. That may mean differences in retirement assets, real estate assets and support for owned businesses.

The inequality in wealth and assets can be attributed to wage differences, child or eldercare responsibilities that disproportionately are managed by women, and financial literacy gaps.

“It’s well-documented that women are often expected to take time away from work to serve as caregiver — both to young children and elderly relatives — and this can have a negative impact on career trajectory and long-term earning potential,” said Brown.

Navigating an uncomfortable space

Because managing family wealth has historically been positioned as something for men to handle — and because the wealth management industry has sometimes been structured in a way that follows this line of thinking — it’s likely that an overall gap in financial literacy and confidence exists among genders. A 2021 research study from the Global Financial Literacy Excellence Center at George Washington University noted that women are less financially literate than men, but much of that gap can be attributed to a lack of confidence rather than a lack of knowledge.

Lower confidence around financial decision-making or general money management can ultimately contribute to gaps in retirement savings, participation in investing and wealth accumulation.

However, despite the challenges and wealth gaps facing women, experts agree there is room for optimism.

“There’s no question we have a long way to go, but the wealth management industry is making significant progress addressing how wealth and wealth-related topics are communicated to our increasingly diverse clientele — including women,” said Brown. “I remain optimistic that we’ll continue closing the wealth gaps women have traditionally faced, and that women as a whole will have a bright financial future.”