Will the feminisation of wealth break the "three-generation curse"?

The “three-generation curse” is a belief that family wealth rarely survives beyond the grandchildren. But with the growing feminisation of wealth, there is hope that this pattern can change.

As women increasingly inherit and control significant wealth, they bring a fresh perspective to financial management that some advisers believe could help preserve family wealth for generations to come.

Women tend to focus on long-term goals, ethical investments, and family harmony, all of which are critical to breaking the cycle of wealth erosion.

However, the success of this shift depends on equipping women with the financial literacy, confidence, and tools they need to manage wealth effectively.

Tracey Sofra, a financial adviser at Sofcorp Wealth and founder of the WOW (Women of Wealth) network, believes there’s still much work to be done to prepare women for this monumental shift.

“Many women are not prepared. There are so many people out there selling things to women that they don’t need. Not everyone needs to buy a property to retire, or three properties, or invest in property through their self-managed super funds – or whatever else people are selling.

“It’s not about sales; it’s about knowledge. Stop selling to women who don’t know any better and start teaching them how to make informed decisions,” Tracey says.

Clarity of Purpose and Financial Literacy

For families – and particularly women – to navigate wealth transfer successfully, clarity of purpose is essential. Tracey emphasises that financial literacy is a skill that is rarely taught, affecting both men and women. She highlights that behaviour around money, shaped by past experiences and family history, plays a significant role in financial outcomes.

“Simply acquiring financial skills isn’t enough,” Tracey says. “Managing one’s financial behaviour is crucial.”

Tracey underscores the importance of understanding a client’s personal goals and experiences when offering financial advice.

She finds that women often resonate more with female advisers than men, as they feel better understood and less condescended to.

Common connection points include family, children, and social responsibility, with many women expressing a preference for ethical investments and a focus on achieving specific life goals rather than just financial returns.

Building Confidence and Empowerment

A smooth wealth transfer is no simple task, particularly when it involves multiple inheritors.

For women, the challenge is compounded by a lack of foundational financial knowledge and confidence.

Tracey notes that many women, especially those who are single or divorced, are eager to gain financial independence but often lack the resources or guidance to do so.

“We need to start with empowerment,” Tracey says. “It’s about advisers providing basic foundational knowledge and fostering the confidence to ask questions and make informed decisions.”

She is critical of approaches that focus solely on selling financial products rather than educating clients. For Tracey, the key is to listen, understand, and support women in their journey toward financial independence.

The Role of Advisers in the Great Wealth Transfer

Financial advisers and accountants have a crucial role to play in ensuring a smooth wealth transfer.

Tracey’s approach begins with understanding a client’s financial situation and goals through a detailed questionnaire and an initial complimentary chat.

She emphasises that it’s never too late to start financial planning and that time, not money, is the most powerful asset.

Advisers must help women build confidence, provide them with the tools to make sound financial decisions, and create a long-term strategy that aligns with their personal values.

A Call to Action

With an estimated $4.9 trillion set to be passed between generations in Australia alone by 2030, the stakes are high.

The Great Wealth Transfer represents a once-in-a-lifetime opportunity to reshape the way wealth is managed and preserved.

Tracey Sofra’s insights highlight the urgent need for financial education and empowerment, particularly for women.

By fostering financial literacy, building confidence, and aligning wealth with personal values, families can ensure that their legacy endures for generations to come.

As the feminisation of wealth continues to gain momentum, the question is no longer whether women will control significant wealth but whether they will be ready to manage it.

The opportunity to support which richer advisory services that connect with women, is now.