Both Sides of the Table: Women and the Great Wealth Transfer

Katie D’Angelo: Hi, I'm Katie D'Angelo, Allspring's head of Global Relationship Management. I'm here today with Megan Miller, our head of Systematic Options and co-head of Custom SMA (Separately Managed Accounts) Investments. And for our audience, welcome to SpringTalk. Megan, thanks so much for joining me today, not only to celebrate International Women's Day and Women's History Month, but also to talk about a megatrend in the making, the Great Wealth Transfer, and what that's going to mean specifically for women.

Megan Miller: Thanks for having me. I'm excited to be here.

Katie: Absolutely. So, to kick off this International Women's Day episode, could you share with our listeners a little bit about your investment career, its origin, progression, and what it's like to build a career in what has historically been a very male-dominated industry?

Megan: Yeah. So, I was offered an internship my sophomore year of my undergraduate schooling and it was at an investment firm called Analytic Investors. And I was studying math and economics and I was really excited to work at a quantitative investment firm. And I did that for a few summers and then I joined full time. And it is actually one of Allspring's predecessor firms. So, I have been with the same team for about 20 years now and have held various roles over that time. I started as a researcher and then moved to the trading desk and into portfolio management. And during that time, most of my colleagues and my teammates, all of my bosses were all men. So, at the time, I spent most of my career really ignoring the fact that I didn't fit in, but now I embrace it. I really love and believe in diversity and I do think the most diverse teams will serve our clients the best. So, I'm really excited that Allspring is doing such a great job and focused on increasing our diversity. And 50% of our senior leaders are women and I think that's fantastic, including you, Katie. And I'd love to hear your story and how you got started.

Katie: Yeah, Megan, and I equally am incredibly proud of Allspring for, frankly, the fact that 50% of our executive team is female. It's a rarity in the industry, something I hope isn't as rare going forward, but I'm incredibly proud to be a part of our leadership team. And I would say the same, Megan. I think, frankly, I've always wanted to be a part of this industry. I can remember as a little girl, when asked what I would be doing for a living, I don't know that I knew what the job was, but I always drew pictures of myself in a high rise in a boardroom wearing a black suit. I love being a part of our industry. And yes, it has historically been very male dominated, but I think I've always used that as sort of fuel. I wanted to be at that table. I wanted to be there. And so, to me, I've always focused on, well, what can I own? What can I do to make sure that I'm as competent as I possibly can be, so I deserve the ability to be at that table? And then if you have the opportunity, I've always tried to strive to speak up, to use my own voice, to make sure that when we have those opportunities, that women are heard. And I think that the more that we do that and the more we do it together, I think we'll see more and more of us at those tables. So, pivoting, I think, to thinking more on that personal note, Megan, I'd love to ask, if you can tell us about a woman in your life that acted as a mentor that you believe helped you along the way to your current role as a leader on the Systematic Edge investment team here at Allspring.

Megan: You know, Katie, most of my mentors have been men and I think it's just the nature of the industry and the teams that I've been on and the time I started my career. And thankfully, I've had a number of supporters that have helped me in my career. And the way that's been is through allyship with men just helping support the different roles that I've had. And the mentors that I've had have embraced my role and my leadership and my abilities to be part of the team. And that's been incredibly helpful. And I think they've just help strengthen the platform that I'm standing on now and just helping me gain confidence and helping me feel that I do belong here. And that, to me, has been so helpful and important. But I do think it has been noticeable that I didn't have many women as mentors and I am excited now that the industry's been changing and evolving and that I could be that mentor for women advancing in our industry.

Katie: And I love what you said about mentors and allies. And I guess how do you strive to be that person for others?

Megan: I really do believe in fairness and equality. I believe in hard work and I hope that I express those values. And those are the values that I see and appreciate in others and through mentorship and other opportunities and being in that role and being in that position and in a leadership role to help bring women along. And it's so important to have representation. It's essential. And I struggled without having role models to look up to within the industry, within the firms and teams that I was on. And so, I know the importance of having that role.

Katie: I agree and I think, again, that the more of us there are, I think the easier it is for other women to see a spot for them within our industry. Like I mentioned, we're also here today to discuss an important trend in the making that Allspring and I think everyone has been following and that is really the Great Wealth Transfer. And I want to talk to you about what that means for women specifically. One McKinsey article stated that by 2030, American women are expected to control much of the $30 trillion—with a T—in financial assets of the $84 trillion expected to change hands here over the next several years. A potential wealth transfer of that magnitude, actually, when you put it into context, it approaches the annual GDP (gross domestic product) of the United States. So, what do you think when you hear that, Megan, and specifically for women, as well?

Megan: I think it's amazing. I think it's great that women are about to be the new face of wealth. That's awesome. And it just provides so much opportunity for women and in the industry. And as we discussed, it's been an industry that's been so male dominated. And so, this trend will just lead us to a new era of investing and one where we have women on both sides of the table. I think it's, like I said, amazing that women are inheriting all this wealth, but with that wealth and inheritance comes a lot of responsibility for managing that wealth. And so, I think we'll see an increase in financial literacy. I think that more women will be making decisions on how to manage those assets. And who better to be on the other side of the table than another woman, helping make those decisions? So, I think it's just great for the industry to embrace gender diversity and, for nothing else, to engage with a new audience.

Katie: Agreed. And we recently published an infographic on the Great Wealth Transfer. And the piece really helps to describe the magnitude of this megatrend that we're now seeing. The piece also helps to explain the potential impact on wealth management and what financial advisors specifically can do to prepare. One key takeaway for advisors was to clearly understand your clients' goals and objectives and to engage in these discussions now in order to help clients prepare. When you consider that a large portion of these beneficiaries are going to be women, what does that mean for financial advisors?

Megan: Yeah, I think personalization is our future. The ability to personalize portfolios and have a wide range of relevant investment solutions is going to be a key to success in the industry. It will allow advisors to guide on different return goals, different risk tolerances. Regardless of if you're a man or a woman or an institution, it's that personalization that will be the key to success. And alongside personalized solutions is democratizing the education needed and increasing that financial literacy on understanding the different pros and cons and risks and opportunities of the various investment strategies that are available in our industry. And I think we'll just see more people making investment decisions. And so, it's I think it's important for people to understand that the personalization goes along with the education. And so, I think we'll see that going forward. And importantly, with transferring that large amount of wealth is tax management. And we mentioned it in the infographic. But I know it’s essential that these solutions are tax aware. And Katie, I know you've done a lot of work in your seat in talking about tax management and tax awareness. And what do you see on your side of the table?

Katie: Yeah, thanks, Megan. And I agree. Tax management is really a critical piece of the wealth transfer conversation for advisors and their clients. The process of preparing for the transfer of wealth should be planned for. It involves identifying and addressing challenges and opportunities that may arise through the process and I think, honestly, developing a generational wealth transfer strategy for preserving that wealth. And I think there's really several key factors to take into consideration. One of the most important is the value or composition of the assets that will be transferred. This may include illiquid assets like real estate, businesses, also financial investments and concentrated stock positions. Given this, it's really critical to have a plan in place years in advance as creating a tax strategy to help preserve as much wealth as possible can require time. And I think what this means is that it is a super timely topic for financial advisers and clients. For example, offsetting the future sale of a business that may transfer could include investing in a direct indexing portfolio that's designed to utilize losses to help offset future gains or creating a long-term plan to tax efficiently sell shares of a concentrated stock position in order to create a more fully diversified portfolio or fund other personal goals. These are really all strategies that we are currently discussing with our financial advisors in order to help them design a personal tax strategy based on their clients' needs. And again, the wealth transfer represents a phenomenal opportunity not to wait for but, honestly, to be engaging with clients on today.

Megan: Katie, how about advisors’ ability to provide personalized, customizable investment options? How can this help address client-specific needs?

Katie: Absolutely. Using separately managed account strategies like direct indexing can allow advisors to tailor their investments and based on really specific needs and apply a broad array of tax management capabilities to help investors keep more of what they earn or inherited throughout the lifetime of the investment. The same can also apply to fixed income portfolios. So, if we tie this back to the business owner or transfer of a business, as well as the corporate executive or transfer of concentrated stock positions, I think we at Allspring have done a great deal of research and created content to support our financial advisors in these discussions. And in doing so, I think we really hope we can play even a small role in supporting our advisors in positioning themselves as experts in generational wealth transfer, working with business owners and working with corporate executives so they can continue to attract more of those clients to their practices. And with that, I know we're coming at the end of our time here on SpringTalk. So, thank you, Megan, for joining me today to celebrate International Women's Day and talk about the Great Wealth Transfer and what that means for women, financial intermediaries, advisors, and more.

Megan: I enjoyed my time here. Thanks, Katie.

Katie: And thank you to our audience for joining us on SpringTalk. From all of us here at Allspring, we wish you a happy International Women's Day and a great rest of Women's History Month.

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