July 13, 2023: How women are making an impact in wealth management

Jul 11, 2023
2 months ago
Barbara Goodstein

Barbara Goodstein has spent her career in wealth management and has served in many capacities — as an experienced CEO, corporate executive, entrepreneur and corporate board member. Most recently, she joined R360, an invite-only group of ultra-high-net-worth individuals who have attained a net worth of over $100 million and whose goal is to use their abilities, wealth and knowledge to leave an enduring legacy. Goodstein spoke with Crain Currency about legacy, impact and how women continue to move the wealth management industry forward.

Women are reimagining the impact of wealth and what it means. How are you seeing that play out today?

I’ve observed that as women amass wealth, they simultaneously strive to shape their legacy, an endeavor that seems to bear more significance for them than for many men. The process of wealth accumulationBarbara_Goodstein among women often aligns more closely with their charitable activities, transforming them into a formidable force in philanthropy. Several women at R360 have established their own charities, mirroring their personal interests or causes. One such woman whose sibling has Down syndrome has emerged as the state of Connecticut’s largest employer of people with disabilities.

Can you share with us an example of how female patriarchs or female family members are making a direct impact today? 

Whether it’s fighting sex trafficking, helping veterans recover from PTSD, employing people with mental and physical disabilities or sharing their professional expertise to mentor the next generation of women in their field, many of the women of R360 are engaging in work that not only makes an impact but holds great personal significance for them as well. Through our newly formed Philanthropy Circle, they are exploring how to leverage their social capital, professional skills and charitable dollars to build legacies of good work. 

Legacy has always been a key pillar for family offices. How are you seeing women take that concept and redefine it?

Women are very focused on family, and that includes educating and preparing their children to manage significant wealth. The goal is to raise happy, socially responsible adults. R360 has created a robust program called Rising Leaders to help families of wealth do exactly this. Rising Leaders was created based in part on the feedback from female members who want to ensure their children understood how to manage finances, how to protect wealth for future generations and how to protect themselves from people who might try to take advantage of them. 

Topics that have been of keen interest to our female members include how to protect their legacy, how to broach the concept of prenups with their children and how to legally insulate their families from risk. Trust breakdowns, lack of preparation and mismatched values can threaten wealth over time. Women are very focused on taking the steps necessary to protect their wealth for multiple generations and, more important, to help ensure the relationships between family members remain strong and healthy through the generations.

When you look to the future, how do you see women making their mark in the family office community?

Consider this: Today, 90% of wealth over $100 million is in men’s hands. Their average age is 77.

McKinsey confirms that the next 10 to15 years will see the most significant transfer of wealth from men to women in history.  As wealth moves from men to women, the women in this industry will become more prominent, more important and more valuable. The demand for women who know how to manage family offices and how to approach family dynamics will grow commensurate with this wealth transfer. An implication of this shift will be the importance of mastering soft skills — prioritizing listening, empathy and connections.

Women see and appreciate this coming change and are anxious to connect with other women. The Women’s Circle at R360 has had tremendous participation and, notably, is for both female members and female spouses. It is a group that was created to delve into the phenomenon of this wealth transfer and the impact wealth can have on families and the broader community. The women at R360 are creating a road map for future generations to follow, and that is incredibly empowering and exciting.


The value of volunteering: Planting seeds to grow for generations 


There is little in life as noble as periodically suspending the seemingly endless pursuit of our own self-interests to serve others who perhaps are less fortunate.

Contrary to popular belief, donating your time and/or financial resources need not be an entirely selfless exercise. It’s perfectly OK to use such opportunities as a way to also benefit yourself and your family. It can, and frankly should be, mutually beneficial. An astounding 96% of volunteers reported that the action enriched their sense of purpose in life, which can also offer both mental and physical health benefits.

Volunteering with family members is a great way to instill a sense of gratitude for one’s blessings and inspire others to give to those in need. Doing so serves as a tangible affirmation of a family’s value system. Many high-net-worth individuals and families are visible pillars within their respective communities because theyVincent_Birardi have proactively chosen, often over multiple generations, to give back to those in need. As a certified financial planner, I’ve had the pleasure of seeing several clients and their families take the initiative to volunteer their time together at annual events such as holiday toy drives and meal preparation and delivery at local food banks. Such family gatherings have the power to not only instruct younger generations on the importance of giving back to others but also can foster and reinforce appreciation in younger children to be grateful for what they have.

When it comes to volunteering your time, another powerful benefit comes from the sheer activity of networking — meeting new people — possibly in your current career role and/or industry. If you so choose, you can also talk about your volunteering activities with colleagues and clients or include your passion for giving back in your company’s marketing materials, such as in your corporate bio. Don’t forget: The time you spend volunteering for an organization is not tax-deductible, but expenses such as travel or parking costs may be.

The ripple effect of discussing volunteering opportunities with co-workers can be quite monumental — you never know whom you’re going to inspire! 

Once you’ve found an organization you enjoy volunteering with, you can deepen your generosity by donating financial assets to them or to nonprofit institutions. Doing so may very well net you a tax write-off. Specifically, when you donate cash to a public charity, you can generally deduct up to 60% of your adjusted gross income. Moreover, appreciated assets, including long-term appreciated stocks and property, are generally deductible at fair market value — up to 30% of your adjusted gross income — provided you’ve held them for more than a year. 

A donor-advised fund may be an appropriate vehicle to optimize tax savings in current and future years. Be sure to speak with a certified financial planner to learn more about their applicability to your specific philanthropic giving goals.   

For those who must take required minimum distributions (RMDs), donating money from a tax-deferred retirement account such as an IRA can relieve you of otherwise having to include RMD amounts as taxable income in the year that they must be taken. Specifically, you can elect to make qualified charitable donations (QCDs) of up to $100,000 each year that are not included in your annual taxable income. QCDs can be completed starting at age 70½, a full 2½ years before RMDs begin at age 73. They can be a great way to give to others and lighten your future tax liabilities.

High-net-worth individuals and families have lots of opportunities to facilitate change in both society and the fabric of their own family dynamics. Raising compassionate kids starts with modeling and exhibiting compassionate behavior. Showing how you donate not only money, but also your valuable time, builds the foundation of a brighter and more fulfilling future for all.