It’s no secret that women today play a significantly larger role as business owners, entrepreneurs or senior executives – much more than they did 50 years ago. It’s an achievement worth celebrating every day, but more so today, as we celebrate International Women’s Day.
With a greater share of the wealth (gained through earnings and inheritances, for example), women are increasingly commanding the attention of the financial services industry. That’s no surprise. According to Strategic Insights, in 2014, women (with $500,000+ in assets) controlled a total of $900 billion in assets – a number estimated to more than double to $2.1 trillion by 2024. Women are accumulating wealth through their work, investments and from inheritances.
As their wealth grows, however, are women playing a big enough role in family wealth planning discussions? More importantly, are their financial concerns being sufficiently addressed?
We asked a few of our Advisors who work with high net worth families about the concerns and challenges the women they work with face, and how they help navigate them. Here is what they said.
1. Look for knowledge, trust and respect in your Advisor
As a whole, women are concerned about financial safety and security, says Midori Hillis, a certified financial planner with IPC Investment Corporation in Victoria, B.C.
“They aren’t necessarily after the highest rate of return – they’re after stability and making sure they have a financial plan that fits within their timeline,” says Midori. “Women are planners. For them, it’s not just about making sure their RRSP is topped up but more about what their overall financial plan looks like year after year.”
High net worth or not, female investors face a number of unique concerns and circumstances. “Generally women outlive men, and I have far more widowed female clients than widowed men,” says Rob Charron, an investment advisor with IPC Securities Corporation in Mississauga. “So there is that worry when they’re thinking about the different phases of retirement”.
Marie Phillips at IPC Securities Corporation in Ancaster, agrees. Women’s longer lifespans call for more comprehensive insurance planning, she says, as well as a savings and investment calculation that covers not only many more years but potentially higher health care costs.
“They may need long-term care and don’t have family to help look after them,” says Marie. “As they get older and lose their spouses, many women just won’t have the same social support that men commonly do.”
There’s never a one size fits all solution to any of these challenges.
Whether it’s inheriting a business or needing an investment strategy that allows them to preserve and grow their wealth, it is important for women to always ask questions and work with an Advisor who takes the trouble to understand their concerns and motivations in the wider context of their family’s overall financial planning needs.
As women, take charge of your own financial legacy.
2. Prioritize your financial decisions
With their multiple roles as successful professionals or entrepreneurs, parents and caregivers, women are often so pressed for time that they fail to get their finances in order, observes Dan Nolan at IPC Securities Corporation in Ottawa.
”They’ve faced a lot of challenges to get to where they are today, and they’re so busy doing what they do so well that they forget or simply don’t have time to take care of their personal financial situation,” says Dan. “I find with many of my female clients, they’re acutely aware of this and maybe tend to worry about it more than my male clients might.”
Women continue to take on a heavier share when it comes to caring for family members. Statistics Canada says women make up close to 55% of the population looking after a child, parent, or spouse – sometimes all at once. This reality needs to be reflected in their financial plan, says Rob.
An Advisor can help you plan for and manage the tough financial decisions. They can also work with you to sift through the barrage of noise and information that come your way.
Look for empathy and understanding in your Advisor - a financial coach with the emotional intelligence to personalize a solution to your more complex reality.
3. Educate yourself and make time for the big conversations
While there’s much to praise in the statistics, there’s also an urgent imperative to ensure that as investors, women are prepared with the knowledge and resources they need to preserve and grow their wealth.
As wealth transfers hands over the next decade and women come to own more of it, it’s important for them to understand what this means to them and their families. They may need to initiate conversations to prepare themselves to own a business or be stewards of their family wealth and assets.
Make time for the important conversations. Surround yourself with a team who can arm you with the resources and knowledge you need to ensure your financial plan is geared to your goals and aligned with your values.
These are just some of the issues facing high net worth women. Far from being insurmountable challenges, they present opportunities to sit down, take part in conversations that are often relegated – or conceded - to their partners, and create a plan to preserve and grow their wealth.
Happy International Women’s Day! May the conversations with your Advisor transcend the day.
Ask one of our Advisors how they can help you and your family manage your financial well-being.