As founder and CEO of Chicago investment bank Verit Advisors, Mary Josephs is used to setting goals — and crushing them. And she approaches managing her family’s wealth in the same way.

Josephs relishes the task of being deeply involved in her household finances, which includes saving for her five children’s education, planning for retirement and managing the family’s regular investments and bonds: “It’s fun — that sense of ownership of your destiny and control.”

Women like Josephs represent a seismic shift in control of family finances over the past several decades: as women gain more control of the world’s wealth — about 30 percent last year, up 5 percent from 2011— their role as stewards of their family’s finances will continue to evolve.

Today, more women earn advanced degrees, hold leadership positions and sit at the helm of companies. They approach managing their wealth with the same knowledge, confidence and sophistication that brought them personal success. Indeed, today’s affluent, educated career women take a three-pronged approach to managing family finances by focusing on financial literacy and goals, passing financial fluency to the next generation and building a financial legacy.

Many women are taking that multi-tiered approach to address potentially overlapping issues, says Suzanne Shier, senior vice president and director of Wealth Planning and Tax Strategy for Wealth Management at Northern Trust. “Women are intentional about their careers, so they want to be intentional about their finances,” Shier says.

Mary Josephs sits at her office at the company she founded, Verit Advisors, in Chicago. T Brand Studio

Focusing on Financial Fluency and Goals

Josephs says she learned to take a 360-degree view of finances early on, largely due to her mother’s influence. When Josephs’ grandfather died suddenly, her mother and three siblings received a large insurance settlement. Josephs’ mom managed the money so well that she was able to send all 12 of her children to college.

Josephs credits her mother with instilling financial confidence, entrepreneurship and basic money management skills from the time she was a child. Josephs’ first job was babysitting at age 9, and she opened her first bank account at 10.

That sense of financial competence as a youngster helped her build a broader set of skills later in life. Josephs believes financial literacy and fluency are essential to any successful person, considering them as inputs that directly relate to outputs. “Your outputs in life are your time and treasure,” she says. “To have control of both of those and better direct how you spend your gifts, time and money helps synchronize your life with your aspirations.”

Josephs adds that it’s equally important to understand that it takes a village to manage wealth. “It’s so complex out there, and to do it right you need a team. You need a tax guide, a legal guide, an estate plan and a financial guide,” she says.

Claudia Sangster, director of Family Education and Governance, Wealth Planning Advisory Services for Northern Trust, says many women are strategic about their money. “Women are much more likely [than men] to make a goal and invest toward that goal. They’re not just in it to be competitive, to see if they can beat the markets or the benchmark,” Sangster explains. “They’re much more likely to sit down with an advisor and map out a financial lifeline of ‘Here’s what I want to accomplish and when.’”

Sangster believes taking the long view can help women prepare for life’s curveballs, whether it’s a sudden layoff, a divorce or a stock market shock. “When you invest for a set of personal goals and not just to beat the market, you can sleep better at night,” she says.

Passing on Financial Literacy

In the same way that Josephs’ mother trained her in the financial basics when she was young, many women recognize the value of starting early with their own families. “Raising children to value work and what it involves and equipping them to be financially independent is important to women today,” Shier says.

Family financial literacy is important to women today: Raising children to value work and what it involves, and equipping them to be financially independent.

Suzanne Shier, senior vice president and director of Wealth Planning and Tax Strategy for Personal Financial Services at Northern Trust.

This approach offers multiple benefits, such as building kids’ confidence and opening channels of communication within the family. Stripping money of its secrecy is vital, Sangster says. She urges women to seize opportunities to talk about wealth with their children and grandchildren and put it in context.

“Starting at a very young age, make sure family members understand their values around wealth,” she says. “We call them ‘money and meaning’ checks — taking opportunistic moments to answer questions.” This may be when kids see people in need on the news, or when they ask, “Mommy, are we rich? Why do we live in a big house?” As children get older, conversations about money management can and should become more complex. Henry Johnson, president of Northern Trust’s East Region Wealth Management business, also emphasizes the importance of teaching younger family members about balancing their own needs with the needs of others.

Josephs has done this in part by setting a good example for her children: she volunteers at Big Shoulders Fund, a Chicago nonprofit that offers a stock market program to teach financial literacy to eighth graders in Chicago’s public schools. Johnson says it’s never too early to get young people thinking about what is ultimately their fiduciary responsibility — “because, whether they’re a trustee or decision maker in family related charities, they will be responsible for something bigger than themselves.”

Maxine Bédat sits among the many objects she has collected from her travels around the world in her home in the Chelsea neighborhood of Manhattan, N.Y. She says the objects inspire her. T Brand Studio

Creating a Financial Legacy

For many women, building a financial legacy means instilling financial literacy and values in their children. But successful women without children should also think about building a strong financial legacy, says Maxine Bédat, cofounder and CEO of Zady, a New York City-based “slow-fashion” company that encourages customers to “make conscious purchases by investing in longevity, not the latest trend.”

Bédat believes it’s important to align her deeds and financial decisions with her social conscience. She founded the nonprofit Bootstrap Project in 2010 to help women artisans in developing countries start businesses. “Helping women start businesses is such a powerful way to give a hand up instead of a hand out, and provide them with the same tools you and I have access to,” she says.

I think it’s important to invest your dollars in the issues you believe in.

Maxine Bédat, cofounder and CEO of New York City-based “slow-fashion” company Zady.

As a former lawyer law clerk in Tanzania for the International Criminal Tribunal for Rwanda, Bédat puts her money where her mouth is on social issues. She invests in socially responsible funds, which hold securities in companies that adhere to social, moral, religious or environmental beliefs.

“I think it’s important to invest your dollars in the issues you believe in,” she says. “A lot of funds are going in this direction, and I definitely invest in those. That’s key for us as citizens and consumers, and it sends a strong signal to companies and industries to do the right thing.”

Putting Financial Goals to Work

While there’s no doubt that we’re living in fast-moving, boundary-changing times, it’s clear that women have their finger firmly on the financial pulse. They are focused on the future, planning how to manage their family’s finances today and protect their legacy tomorrow. They may go about it in different ways, but they share a common destination.

The New York Times

Paid for by Northern Trust