Understanding the SHEconomy: What financial professionals need to know

03/01/2024 — Key takeaways:

• The “Sheconomy” signifies women’s escalating economic influence.
• Greater workforce participation by women, educational advancements, and societal changes have contributed to this shift.
• Financial professionals can adapt with tailored strategies to better serve their evolving female clientele.

The summer of 2023 saw the immense popularity of the Barbie movie, the mega-successful music tours of female artists like Beyonce and Taylor Swift, and then reports that for the first time, single women own more homes than single men.¹ Women are shaping the economy more than ever before. The term “Sheconomy” represents one of the most significant shifts in modern economics, and it’s a topic that every financial professional should be familiar with. But what exactly is the Sheconomy, and why has it become a buzzword across finance and business circles?

The rise of the Sheconomy

Speaking of sold-out theatres and stadium tours, Sheconomy speaks to the growing economic influence wielded by women. In addition to the growing number of women in the workforce and an increase in their spending power, 78% of women identify as the primary household shopper.² Historically sidelined in financial narratives, women are now at the forefront of economic change, fostering new market trends, and reshaping the financial landscape. Studies suggest women control about one-third of world wealth, and their financial power is expected to rise.³ This shift has wide-reaching implications that demand attention from the financial industry.

Key factors driving the Sheconomy

Several factors contribute to the burgeoning Sheconomy, and the continued advancement of women in society is a major player. To put things into perspective, until the Equal Credit Opportunity Act was signed into law in 1973, women were unable to open a bank account or apply for a credit card on their own. Since then, women have progressed to owning businesses, buying homes, and becoming the primary income earners of their households. And with more women in high-paying jobs and leadership roles, their economic impact is expanding. Educational attainment among women is also on the rise, leading to increased earning potential. Moreover, societal shifts like delayed marriages and childbearing give women more time to focus on their careers and personal investments.

The impact of the Sheconomy on financial services

Financial professionals must adapt to serve this influential demographic whose financial needs and approaches may differ from traditional models. Women tend to favor responsible investments⁴, show interest in sustainable and socially responsible portfolios⁵, and prefer long-term planning over short-term gains⁶. Tailored advice, gender-lens investing strategies, and a focus on relationship building can pave the way for successful client interactions within the Sheconomy. And in an era where corporate social responsibility and equality are under the microscope, embracing the Sheconomy can improve a firm’s reputation and align it with progressive values. Financial firms that are early adopters in recognizing the Sheconomy’s potential will likely have a competitive edge in an increasingly diverse market.

Why financial professionals should care

According to McKinsey research, by 2030, American women are expected to control most of the $30 trillion in wealth that baby boomers will possess.⁷ As a financial professional, you can make deliberate adjustments to your practice to accommodate the ever-evolving female clientele:

• Enhance your understanding of socially responsible and impact-driven investing.
• Develop communication and educational tools that cater to women’s financial planning needs, like financial literacy programs tailored for women or focusing on building confidence in financial decision-making.
• Leverage technology platforms and tools to offer flexible and accessible services that meet the busy schedules of women, who often devote more time to caregiving and housework than their husbands, even when they both work.⁸
• Address women’s top financial concerns, which according to the National Council on Aging’s surveys were the cost of housing, Social Security and Medicare being cut, not having enough savings to retire, and outliving savings in retirement.⁹

The road ahead

The Sheconomy is more than just a fleeting trend—it’s an evolutionary leap in how we understand economic participation and influence. For financial professionals, this means recognizing the unique financial journeys of women, their growing economic clout, and the opportunities they present. As the landscape evolves, those who adapt will thrive in the dynamic and diverse economy of tomorrow. Embracing this so-called Sheconomy isn’t just good practice—it’s essential for those who want to succeed in a world where women are not only participants but leaders and shapers of the economic narrative.