The landscape for money is shifting, and top executives say that the Great Wealth Transfer, the new generation of entrepreneurs, and veterans are paving the way.
At Fortune’s 26th annual Most Powerful Women conference in Santa Barbara, Deloitte U.S. federal health sector leader Beth Meagher said that women are poised to play a huge role in shaping how wealth is invested and deployed. It’s estimated that around $124 trillion in wealth will be passed down by 2048, according to Cerulli Associates, with $54 trillion going to women, $52 trillion to children, and $18 trillion charity. On top of that, women entrepreneurs are on the come-up—Meagher said that they’re one of the fastest growing sources of wealth concentration, up over 125% over the past decade. And women who have served our country are also building momentum, reaching roughly 300% growth over the past couple of years, the Deloitte exec pointed out.
“These trends are changing everything,” Meagher told Fortune executive editorial director Diane Brady onstage. “I think we spend a lot of time on frontier models, and we probably spend a lot of time on geopolitical [issues]. And this shift is something that I think we have a tremendous opportunity to lead from the front of.”
Seema Hingorani, managing director and senior client advisor at Morgan Stanley, caught wind of this trend more than a decade ago. When she was working at the New York City Pension Fund in the early 2010s, she noticed something worrying. Every asset manager in the world was coming to meet with her, yet each had few to no women on their investment teams, Hingorani said. They wrote it off as a “pipeline issue”—but Hingorani didn’t buy it. So she started a nonprofit called Girls Who Invest to get more women into the industry, with 5,000 college women having gone through the program since 2011. Every year they receive around 4,000 applications, and support 700 women annually.
Hingorani also pointed out that for the past seven years, Morgan Stanley has run an incubator helping to invest in more women starting tech businesses. And when they scale billion-dollar companies and take their successes to the bank, they’ll be looking for women to help guide their decisions.
“[Women are] going to have all the wealth,” Hingorani said. “[For] those women—you guys—do you want to have a male financial advisor? If you had a choice, would you want to have a woman financial advisor? A lot of firms out there are hiring all my women, because they get it.”
Beyond how they manage their wealth, women are also setting new expectations about spending it. Carmen James Randolph, founding president and CEO of the Women’s Foundation of the South, is seeing a major shift in her own backyard. Randolph said that the South is one of the fastest-growing regions in the country, and with 41.5% of America’s women of color as the area’s constituents, there’s a new frontier for wealth creation and investment. She’s already seeing that the old-school models of philanthropy are being rewritten to prioritize tangible impact.
“I’ve worked in philanthropy now for about 28 years, and I understand that at its best, philanthropy can be a catalyst for what’s possible. Old models see philanthropy as charity, and new wealth recipients do not see philanthropy as charity,” Randolph explained onstage. “They want to understand and see firsthand the impact that their dollars can have.”
The Deloitte and Morgan Stanley execs agree that the way women want to invest is different from previous generations, by prioritizing social impact in tandem with financial returns. Meagher said that women poised to inherit substantial wealth are focused on three key areas of investment: health, education, and justice. She’s picked up on a trend where wealth advisors are also specifically offering health services; and Randolph says that her foundation is making a big bet on improving maternal healthcare in southern states with difficult access to emergency and routine medical care. Hingorani also noted that every trustee has an interest in affordable housing—even if it means a smaller return than what they could earn at a venture fund.
“Women are looking to pull their investments so that they can have an outsized impact,” Meagher said.