Financial planning Women leaders take control of their work and wealth

The Great Breakup

In what has been deemed the “Great Breakup,” women are leaving their jobs in higher numbers than their male counterparts and at the highest rate seen since McKinsey & Company began its Women in the Workplace survey eight years ago. There are fewer women than men in corporate leadership roles to begin with, not because women are less ambitious, but because they're more likely than men to experience challenges, such as the questioning of their judgement, as they advance in their careers, according to the 2022 Women in the Workplace report. As a result, some companies may be losing the few women who sit among their top ranks.

Why are women leaders moving on?

To understand why women leaders are switching jobs at an accelerated pace, we don’t have to look any further than the global pandemic. “COVID-19 was a catalyst for reevaluation on every level,” says Carey Shuffman, Head of the UBS Women's Strategic Client Segment. “80% of the women surveyed for the UBS Own Your Worth research said the events of 2020 through 2022 caused them to reassess what’s most important to them. Three quarters said the pandemic stirred in them a desire to make a difference in the world and, for some, that means moving to a new job or career that could give them a greater sense of purpose.“

COVID-19 also upended what a typical work environment looks like. Fully remote and hybrid work arrangements became more prevalent, even after work-from-home mandates ended. In March 2022, most employees said they planned to continue working in their preferred environment, according to the UBS Workplace Voice report In motion: How companies can adapt to the evolving workplace. “Notably, women said they were more likely than men to switch jobs or take a pay cut to work in their preferred environment—decisions that are likely to have far-reaching impacts on women’s long-term financial goals,” adds Anca Ciorga, Head of Market Strategy & Engagement for Workplace Wealth Solutions at UBS.

Take control of your money with Wealth Way

“Many women are taking an active role in aligning their careers with their needs and values,” says Marianna Mamou, Head of Advice Beyond Investing in the UBS Chief Investment Office. “A career change is an excellent time to ensure their money is also working toward those needs and values. Working with a financial advisor to understand the UBS Wealth Way approach to investing is a great first step to help ensure your money is working as hard as you are. Using such a framework, women—whether they’ve received a pay increase or pay cut—can define investment strategies that help them understand where their money is and why.”

The Wealth Way approach incorporates three strategies, according to the report Women and investing: Reimagining wealth advice:

Liquidity strategy. The Liquidity strategy consists of resources needed to meet a family’s short-term cash flow needs, including regular income from employment or a pension, safe borrowing capacity, and investment assets earmarked for this purpose. The aim of the Liquidity strategy is to provide enough capital to give an investor the flexibility for greater risk-return potential in other portfolios. The strategy helps manage cash flow for near-term spending needs, usually for the next three years, and it can help women (and investors in general) with cash management and with making sure that budgeting concerns do not affect investment decisions.

Longevity strategy. The Longevity strategy is focused on helping investors meet their goals over their lifetimes. Its aim is to ensure that they’re invested in such a way that they have a high probability of meeting those objectives. The risk here is measured in terms of shortfall risk, in other words the possibility of not meeting investment goals. Such strategies should help women connect their investment portfolio to their objective, particularly addressing their concerns around retirement planning. Looking at risk as the probability of not meeting a goal versus volatility allows for investors to measure success in terms of what matters to them.

Legacy strategy. Once Liquidity and Longevity strategies are adequately funded, investors can invest their remaining wealth in a Legacy strategy. The objective of this strategy is wealth transfer between generations as well as having a positive impact on society. These goals tend to be particularly important for women. Using this framework, investments are positioned as solutions to needs and specific problems that are solved within the context of each investor’s circumstances. Such an approach should provide the necessary confidence and clarity that women are looking for to help them gain control.

Reviewing your financial plans alongside your career progression is essential to ensuring your money is working toward both your short- and long-term goals. Read the report Women and investing: Reimagining wealth advice and reach out to your financial advisor to learn more about the UBS Wealth Way approach to investing.

Main contributor: Kerry Breen

UBS Wealth Way is an approach incorporating Liquidity. Longevity. Legacy. strategies that UBS Financial Services Inc. and our Financial Advisors can use to assist clients in exploring and pursuing their wealth management needs and goals over different timeframes. This approach is not a promise or guarantee that wealth, or any financial results, can or will be achieved. All investments involve the risk of loss, including the risk of loss of the entire investment. Timeframes may vary. Strategies are subject to individual client goals, objectives and suitability.

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