Unlocking the Power of Women in Investing
The financial services industry is undergoing a dramatic shift.
The next generation of investors will be younger and much more diverse, with women taking an increasingly prominent role in building and growing family and personal wealth.
Today’s infographic comes to us from New York Life Investments, and it showcases how this new paradigm will shape the future of products and services on offer in the industry, as well as how wealth managers can cater to these changing needs.
Growing Economic Might
Women are underrepresented in the investing world, but this is changing fast. While various cultural and societal reasons are contributors to this, there is also a more simple driver: rising economic might.
- Women-controlled wealth in the U.S. will increase from $14 trillion to $22 trillion between 2015-2020
- Women control 51% of all personal wealth in the United States today
- Women are set to inherit $28.7 trillion in intergenerational wealth over the next 40 years
Women are becoming more important drivers of income and wealth for their families, as well:
- Women are now the primary breadwinners in 40% of U.S. households – a 4x increase from 1960.
- Women own 30% of all private businesses in the U.S.
- Women now hold the majority of management, professional, and related positions (52%)
Finally, women now make up the majority of recipients of Associate’s degrees (61%), Bachelor’s degrees (57%), Master’s degrees (60%), and Doctoral degrees (52%) in the United States.
The Wealth Management Gap
As women increase raise their level of economic influence to new levels, how will they manage this wealth?
Interestingly, studies show that women think about money and wealth differently than men – and differently from precedents already set in the financial services industry:
|The Good News||The Bad News|
|Women are better savers, saving 9.0% of their salary in comparison to men (8.6% of salary)||Women consistently tend to score lower on financial literacy tests|
|Some research points to women generating better returns (+0.4%) off of investments||Some research points to women investing up to 40% less than men|
Data from a recent survey by New York Life Investments sheds light on why women may be underserved by the financial services industry.
Reasons why women switch financial advisors:
- 33% poor performance
- 29% lack of personal connection
- 27% poor customer services
In other words, women don’t switch investment advisors simply because of poor performance – there are other, more complex factors involved. Part of this is likely because 62% of women say they have unique investment needs and challenges:
Perceptions of women and investing:
- Financial professionals treat women differently – 40%
- Women feel patronized by financial advisors – 36%
- Financial advisors are less likely to listen to investing ideas from a woman – 30%
- Financial advisors push women out of financial conversations – 28%
- Women have less access to financial education – 26%
- Financial professionals find it hard to relate to women – 26%
- Financial advising is a man’s world – 24%
A Deeper Dive
It is crucial for advisors to understand that women are not one large, homogeneous group.
In fact, research shows that there are four unique segments of women that each approach investing differently – and they all have different sets of needs.
Stay tuned for Part 2 of this infographic series, which will detail the differences between these segments.
Visualizing 200 Years of Systems of Government
At the start of the 19th century, less than 1% of humanity lived under democratic rule. See how systems of government have changed over the last 200 years.
Visualizing 200 Years of Systems of Government
Centuries ago, most of our ancestors were living under a different political paradigm.
Although democracy was starting to show signs of growth in some parts of the world, it was more of an idea, rather than an established or accepted system of government.
Even at the start of the 19th century, for example, it’s estimated that the vast majority of the global population — roughly 84% of all people — still lived under in autocratic regimes or colonies that lacked the authority to self-govern their own affairs.
The Evolution of Rule
Today’s set of charts look at global governance, and how it’s evolved over the last two centuries of human history.
Leveraging data from the widely-used Polity IV data set on political regimes, as well as the work done by economist Max Roser through Our World in Data, we’ve plotted an empirical view of how people are governed.
Specifically, our charts break down the global population by how they are governed (in absolute terms), as well as by the relative share of population living under those same systems of government (percentage terms).
Classifying Systems of Government
The Polity IV data series defines a state’s level of democracy by ranking it on several metrics, such as competitive and open elections, political participation, and checks on authority.
Polity scores are on a -10 to +10 scale, where the lower end (-10 to -6) corresponds with autocracies and the upper end (+6 to +10) corresponds to democracies. Below are five types of government that can be derived from the scale, and that are shown in the visualization.
A territory under the political control of another country, and/or occupied by settlers from that country.
Examples: 🇬🇮 Gibraltar, 🇬🇺 Guam, 🇵🇫 French Polynesia
A single person (the autocrat) possesses supreme and absolute power.
Examples: 🇨🇳 China, 🇸🇦 Saudi Arabia, 🇰🇵 North Korea
- Closed Anocracy
An anocracy is loosely defined as a regime that mixes democratic and autocratic features. In a closed anocracy, political competitors are drawn only from an elite and well-connected pool.
Examples: 🇹🇭 Thailand, 🇲🇦 Morocco, 🇸🇬 Singapore
- Open Anocracy
Similar to a closed anocracy, an open anocracy draws political competitors from beyond elite groups.
Examples: 🇷🇺 Russia, 🇲🇾 Malaysia, 🇧🇩 Bangladesh
Citizens exercise power by voting for their leaders in elections.
Examples: 🇺🇸 United States, 🇩🇪 Germany, 🇮🇳 India
A Long-Term Trend in Question
In the early 19th century, less than 1% of the global population could be found in democracies.
In more recent decades, however, the dominoes have fallen — and today, it’s estimated that 56% of the world population lives in societies that can be considered democratic, at least according to the Polity IV data series highlighted above.
While there are questions regarding a recent decline in freedom around the world, it’s worth considering that democratic governance is still a relatively new tradition within a much broader historical context.
Will the long-term trend of democracy prevail, or are the more recent indications of populism a sign of reversion?
Mapped: The Dramatic Global Rise of Urbanization (1950–2020)
Few global trends have matched the profound impact of urbanization. Today’s map looks back at 70 years of movement in over 1,800 cities.
The Dramatic Global Rise of Urbanization (1950–2020)
In the 21st century, few trends have matched the economic, environmental, and societal impact of rapid urbanization.
A steady stream of human migration out of the countryside, and into swelling metropolitan centers, has shaken up the world’s power dynamic in just decades.
Today’s eye-catching map via Cristina Poiata from Z Creative Labs looks at 70 years of movement and urban population growth in over 1,800 cities worldwide. Where is the action?
Out of the Farms and Into the Cities
The United Nations cites two intertwined reasons for urbanization: an overall population increase that’s unevenly distributed by region, and an upward trend in people flocking to cities.
Since 1950, the world’s urban population has risen almost six-fold, from 751 million to 4.2 billion in 2018. In North America alone, significant urban growth can be observed in the video for Mexico and the East Coast of the United States as this shift takes place.
Over the next few decades, the rural population is expected to plateau and eventually decline, while urban growth will continue to shoot up to six billion people and beyond.
The Biggest Urban Hot-Spots
Urban growth is going to happen all across the board.
Rapidly rising populations in megacities and major cities will be significant contributors, but it’s also worth noting that the number of regional to mid-sized cities (500k to 5 million inhabitants) will swell drastically by 2030, becoming more influential economic hubs in the process.
Interestingly, it’s mainly cities across Asia and Africa — some of which Westerners are largely unfamiliar with — that may soon wield enormous influence on the global stage.
It’s expected that over a third of the projected urban growth between now and 2050 will occur in just three countries: India, China, and Nigeria. By 2050, it is projected that India could add 416 million urban dwellers, China 255 million, and Nigeria 189 million.
Urbanization and its Complications
Rapid urbanization isn’t only linked to an inevitable rise in city populations.
Some megacities are actually experiencing population contractions, in part due to the effects of low fertility rates in Asia and Europe. For example, while the Greater Tokyo area contains almost 38 million people today, it’s expected to shrink starting in 2020.
As rapid urbanization continues to shape the global economy, finding ways to provide the right infrastructure and services in cities will be a crucial problem to solve for communities and organizations around the world. How we deal with these issues — or how we don’t — will set the stage for the next act in the modern economic era.
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