Investing: Women face unique challenges

By Lana Sanichar

Did you know that there is currently, according to a whitepaper by IPC Private Wealth, a $900 billion transfer of wealth happening right now? If you didn’t know that then you probably don’t know that it is women who are the recipients of this, one of the largest transfers of wealth in history.

According to a Globe and Mail article, Canadian women will own 50 per cent of the wealth in Canada by 2024 amounting to a whopping $2.7 trillion precipitated by more participation in the workforce, wage increases, inheritances from parents and deaths of spouses. But are women prepared? Is the financial services industry prepared?

The answer is a resounding no. No “mic drop” here.

But why am I focusing on this? Knowing that women are becoming increasingly affluent, they are currently one of the primary targets of the financial services industry, yet when they walk into a financial institution they face the usual challenges. Women and their needs, when seeking out financial advice, are not properly understood by the industry.

It’s widely known that women face unique challenges that inherently set them back from the outset. The ever-present wage-gap, the fact that we have a longer life expectancies, we are usually the primary caregivers of children and aging parents and the impact of divorce are just a few of the things that have a large impact on our financial well-being.

Currently, the male-dominated financial services industry is focused on rates of return as being a benchmark for success. While this is clearly important, women place far-greater importance on other factors when they are considering their investments.

Sorry guys. Research out of Warwick Business School indicates that women are better savers and tend to have better returns than men. But if women are not motivated solely by returns, what are they motivated by? The answer is quite simple. They are looking to ensure security both for themselves and their families.

So what do women place value on when they are seeking help from a financial professional?
Trusted relationships matter. Emotional connections matter. They want to actively participate in investment decisions and creating a trusted partnership above and beyond the numbers with their advisor matters to reach their goals.
Open lines of communication. Women tend to ask more questions and also take more time to contemplate decisions than their male counterparts. A recent article by Ellen Roseman in the February edition Canadian MoneySaver mentions questions like “how much are we up (or down)? What fees have I paid? What taxes are owing? What risks did we take? What changes will we make to my portfolio in coming months?”
They seek to align their values with their goals. Besides their unique challenges that must be taken into consideration, women are more likely to invest in products that make a positive social impact on the world and tend to prioritize their investment goals around these values and goals.

With or without the $900 billion wealth transfer, women face unique challenges that impact their financial well-being that make saving for retirement more difficult than for men. But armed with the right education and knowledge, women and the finance industry can turn this around.

Investing: Women face unique challenges was last modified: April 25th, 2019 by Barb McKay

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