The continued, rapid rise in high-net-worth women – with one estimate suggesting that $81 trillion will be in female hands globally by 2023 ­– will have significant repercussions for the work of advisers. One area where the effect is likely to be particularly profound is philanthropy.

Studies have shown that women are more generous than men, so the ability of wealth managers, accountants, tax specialists and lawyers to provide authoritative giving advice will become increasingly valuable, attracting new clients. But, for many advisers, making the most of this opportunity will require a substantial and rapid change of approach.

Aurelia Kassatly, Charities Aid Foundation

Prudence pays

Though there are numerous exceptions on both sides, would-be female philanthropists tend to be a little more cautious than their male counterparts. They want to really investigate a cause to make sure it’s something they can connect with and have a specific impact on before making donations. They are careful not to overstretch themselves financially, too.

Men are generally less circumspect. We've noticed that some of our male clients may give money to charities based on peer-to-peer recommendations from friends or business associates. They also often give to a larger range of causes.

So advisers need to adjust to this different mindset when working with female HNWI clients. They need to provide them with in-depth information on projects, and take time to reassure them that their goals are attainable and affordable.

Women also tend to prefer making long-term financial commitments to charities rather than the one-off donations generally favoured by male donors. They want to build up an emotional attachment to a project and hopefully see it through to a successful outcome – such as the reconstruction of communities after natural disasters. 

Advisers must nurture this relationship with frequent, detailed updates on how a client’s money is improving a particular orphanage, say, or the outlook of a group of families.

Wealth management has traditionally been something of a boy’s club, so advisers might need to interact with female clients in a different way than they do with men. Blokey talk of cricket and golf might not help build a good professional rapport. Firms should consider bringing in more female advisers, where appropriate.

Different outlooks

Many advisers will need to expand their knowledge of certain causes, if they are to successfully advise the growing numbers of female donors. Prominent HNW female philanthropists, such as Melinda Gates and the Women Moving Millions organisation, have ploughed tens of millions of pounds into projects improving the lives of women and girls.

Many other women are following suit, so advisers need to become well versed in gender issues, ranging from maternal health to domestic-violence charities. Causes such as child development, family wellbeing and health also tend to be important to women. 

Advisers must be mindful that increasing numbers of younger women, particularly, are keen that charities are representative of the people they are helping. Closely involving local communities in infrastructure projects, for instance, or having suitably ethnically diverse leadership teams. 

Many wealth managers are turning their attention towards impact investments, such as renewable-energy projects, where sustainability or social benefits are as important as financial returns. This is another area that appeals to many women and is likely to grow substantially.

Tailored, practical solutions 

With women keen to ensure that their philanthropy is as impactful but financially responsible as possible, advisers must ensure they provide them with a wide selection of workable giving strategies. They have to avoid going down some old tried-and-tested philanthropy-management route when alternative solutions might suit their client better.

A family trust may be a good option for some, as female philanthropists tend to like involving their children in charitable projects, perhaps to teach them altruistic or civic-minded values. Other women may prefer the administrative ease and potential cost-savings of a donor-advised fund, such as CAF’s Charitable Trust. Women are also often drawn to collective philanthropy and giving circles like the female-driven international network Philanos.

When clients are looking to create a deep emotional bond with a charity or cause, reducing tax liabilities may not be the major priority they so often are in other financial planning.

Advisers need to be flexible here and realise that the option that reduces liabilities but limits philanthropic impact probably won’t be the client’s favourite choice.

The need for collaboration

Firms may find that establishing or significantly improving an in-house philanthropic service is a good solution for them and their clients. But working with outside specialist philanthropy advisers will often be particularly beneficial.

Organisations like Charities Aid Foundation have considerable experience of finding the best philanthropy model for individuals. They can organise seemingly complex giving arrangements, such as donating to a US project while living in the UK, in the most efficient way possible. They may also have access to a huge network of charitable initiatives, making it easier to find the perfect fit for your female client, along with resources to help them improve their giving strategy.

Benefits to advisers

Creating an offering that is more appealing to would-be HNW female philanthropists is, of course, likely to lead directly to more clients and income for an adviser.

But helping a client combat of-the-moment problems such as global warming and gender inequality can also make a firm seem more progressive, potentially drawing in a new generation of HNWIs.

An adviser and female client who discuss at length what causes really matter to her when devising a giving strategy are likely to have a stronger, more personal bond. This makes her much less likely to ever move to another company. If children are involved in the charity discussions, the sense of trust this builds with a firm can lead to decades of partnership.

Above all, helping a client create substantial positive change in the world is one of the most satisfying things a wealth adviser can do. It’s a chance to be part of leaving a lasting imprint on society. To make money work not just for a few individuals, but possibly millions of people.

Join us at the Charities Aid Foundation Women in Philanthropy webinar on 27 May. For details, click here    

With thanks to Andrea Solana, Head of Advanced Planning at MASECO Private Wealth, for her support with this article