Building trust and wealth: How advisors can empower women to invest in ETFs

Two powerful trends are converging that highlight why this is a pivotal moment for advisors to engage with and educate women investors about how exchange-traded funds (ETFs) can help them achieve their financial objectives:

1. Women now control a third of U.S. wealth, and that number is expected to grow sharply in the coming years. Women are seen as the biggest beneficiaries of the “Great Wealth Transfer,” and are expected to inherit $54 trillion by 2048, according to Cerulli Associates.1 That’s a huge sum that will need to be managed with women’s specific needs, priorities, and goals in mind.
2. The explosive growth and adoption of low-cost ETFs that offer broad diversification, liquidity, and tax efficiency are transforming how investors build portfolios and pursue their financial goals. The number of U.S. ETFs has more than doubled in the past decade, reaching 4,490 by December 2025, and assets have climbed to $13.37 trillion, up from $2.1 trillion in 2015, according to the Investment Company Institute (ICI). ETFs are “one of the most successful financial innovations in recent decades,” the ICI says.

Making the case for ETFs as key holdings in women’s portfolios 

It’s no secret that women face different, more complex financial challenges than men. Women, on average, live five years longer than men. They earn 15% less than males. And they experience more career interruptions due to caregiving. These financial hurdles place a greater emphasis on the need for portfolio solutions that help women overcome these obstacles. Financial advisors can help women surmount these challenges by explaining the benefits and risks of investing in ETFs. 

Drive home the point that ETFs may be a good fit for women. The two key selling points of ETFs—broad diversification and low costs—are well aligned with women’s financial goals and overall approach to investing. 

Low-cost ETFs make good sense for women, who factor in cost as part of their research-oriented approach to making investment decisions. The broad diversification of ETFs also supports women’s risk-aware investment philosophy that prioritizes financial security and steady progress toward long-term goals. The broad array of investment options that ETFs offer also allows women to align their invested dollars with their values. ETFs are powerful long-term wealth-building vehicles that benefit buy-and-hold women investors who have longer time horizons than their male counterparts.

With the Great Wealth Transfer on the horizon, women’s relationship with money is deepening and growing in importance. Women are already managing the household’s daily finances, such as paying bills, balancing checkbooks, and budgeting. In fact, women often play the role of chief financial officer and are increasingly in control of the family’s purse strings. And women’s financial clout will only increase as trillions of dollars of wealth are transferred to them in the coming years. These trends highlight why it’s important for advisors to gain a fuller understanding of women’s financial goals and values and stress how ETFs can help them achieve their goals.

No doubt, the rising clout of women as a family’s financial decision-maker is real.

Why now’s the time to educate women about ETFs

Advisors have an opportunity to educate women clients on the ABCs of ETFs and highlight the unique features of ETFs that set them apart from other types of funds. 

Index ETFs, which track a basket of stocks such as the largest 500 stocks in the U.S. ranked by market cap, can only match the return of the benchmark they mimic. In contrast, active ETFs are managed by portfolio managers and research-focused analysts with the purpose of positioning the ETF portfolio in a way that produces the potential for market-beating returns in up markets while also limiting downside risk during market drawdowns. This combination of benefits has led to a surge in investor demand for active ETFs, with the number of active ETFs rising from 435 at year-end 2020 to 1,935 by June 2025, according to the ICI.

Key benefits that ETFs offer:

• Low costs. ETFs generally offer lower expense ratios than traditional mutual funds, which can help investors keep more of their returns. For example, the average ETF expense ratio for equity funds was 0.16% at the end of 2024 compared with 0.60% for diversified stock mutual funds. While actively managed ETFs and mutual funds tend to have higher expenses than passive index options, these higher costs can reflect the potential value of professional research and portfolio management. Notably, active equity ETFs have a lower average cost (0.44%) than actively managed stock mutual funds (0.64%).
• Stock-like trading. ETFs trade the same as a share of stock, allowing women to buy and sell ETF shares at market prices during regular trading hours. ETF investors can also place trade orders that specify the price at which ETF shares can be bought or sold, which gives the investor greater control.
• Transparency. Unlike mutual funds, which report their holdings monthly, quarterly, or semiannually, most ETFs are fully transparent. That means they disclose their complete holdings daily, often by the next business day, giving investors full insight into what their fund owns and any portfolio changes.
• Tax efficiency. Thanks to a more favorable structure, capital gains taxes thrown off by ETFs are lower than the tax hit of mutual funds. That makes ETFs good candidates for taxable accounts, which are taxed at capital gains rates ranging from 0% to 20%. In 2024, only 10% of active ETFs distributed capital gains versus 50% of mutual funds, according to T. Rowe Price research.
• Market/strategy access. ETFs offer a wide variety of investment strategies to choose from, ranging from broadly diversified index funds to traditional asset classes, such as large-cap growth stocks or small- and mid-cap equities, as well as niche investment themes like cryptocurrencies, artificial intelligence, robotics, or electric vehicles.
• Active management advantages. Active ETFs can invest in companies that are not members of a stock index and can gain exposure to fast-growing private companies that don’t trade on public stock exchanges. This broad menu of investment options enables advisors to create portfolios for women that are more customizable and better aligned with their values and goals.
• Top money manager access. Active ETFs are run by experienced and proven fund managers and also benefit from research-driven security selection, the flexibility to adapt to changing markets, and risk management.

Building client bonds with the help of ETFs 

Advisors can strengthen their relationships with their women clients by embracing the TLC model, which focuses on trust, learning, and communication. Connecting the dots and making the case as to how ETFs are aligned with women’s specific needs, priorities, and goals helps build trust and strengthen client connections. Research shows that advisors who build a strong rapport with women clients tend to hold on to them as clients even after the death of their spouse. 

While women face different money challenges than men, they’re increasingly ready and able to take on the challenges. When it comes to money, personal finance, and investing, women’s confidence is on the rise. More than half of women now express “financial confidence,” according to McKinsey. The financial opportunity to advise women is huge, as 53% of assets controlled by women are unmanaged, and these assets are expected to grow to $10 trillion by 2030, McKinsey says.2 

Attracting and retaining women clients as they control increasing amounts of assets and make more financial decisions is crucial to the growth of your practice. Harnessing the power and investor-friendly features of active ETFs to address women’s unique financial needs throughout their lifetime is a way to earn their trust and boost their odds of reaching their financial goals.