Women and wealth

Establishing trust is key to building relationships with this influential yet misunderstood demographic

Women’s share of global and Canadian wealth is rapidly growing. In fact, by 2026 the privately-held wealth of Canadian women is estimated to rise from $1.2 trillion to $2.7 trillion, representing 50 per cent of total private wealth in this country. The financial services industry must get up to speed to better understand the mindset and expectations of this growing group of investors.

As increasing numbers of women create wealth (due to greater workforce participation as women become the leading holders of post-secondary degrees) or inherit wealth (as they come into money from parents and/or spouses), they are becoming a dominant market segment.

“We are no longer just a niche market,” says Sarah Widmeyer, Richardson Wealth’s Director of Wealth Strategies. “And yet, this is a market our industry has not observed well because of women’s complex feelings surrounding investing and wealth management.”

For many women, money is an emotional subject closely tied to safety, security and independence. Add to this the fact that many women are currently swept up in caring for elderly parents while at the prime of their careers, managing the household and raising teenagers. This can create feelings of anxiety, loss of time and control in the “sandwich” generation of women.

“Women see money as a means to an end. And as such, they want to connect money and investing to their lives. Don’t simply tell me about the biggest pile of money I can accumulate, explain my money in terms of what it can do for me – if something happens, can I still stay in my house? Can I afford to send my kids to the universities of their choice or take in my aging mother to live with me?” Widmeyer says.

“There’s a big difference in how men and women consider themselves to be doing well financially. Men are more likely to be satisfied with seeing a healthy return on their investment portfolio, if not competitively wired to seeing how their portfolio return ranks against others, whereas women want assurance that they are on track to meet their financial goals and will have enough accumulated to last them through their declining years.”

As a result, the investment industry will be challenged to improve how it addresses all segments of Canadian wealth.

“Naturally, not all women think ‘this’ way just as not all men think ‘that’ way, but a more adaptive and specific approach is necessary as Advisors deal with all holders of wealth,” she says.

“Studies show that women appreciate a ‘don’t talk at me, talk with me’ approach in meetings. In other words, don’t spend a tremendous amount of time telling me how good you are or how smart you are – make the discussion about me. Learn what issues are keeping me up at night.”

Building a platform that speaks to the needs of women

Ask a woman what it’s like to walk into a car dealership to buy a vehicle with her husband and more often than not, the word “invisible” will be mentioned.

“The investment industry has a similar problem, because usually, it’s the men who are driving the bus in a portfolio review session,” says Widmeyer. “Traditionally, women tend to be pretty quiet in those meetings, so the Advisor might make the mistake of assuming they’re not interested, don’t have an opinion or simply don’t care, when they’re actually assessing if the Advisor is someone they like and can trust.”

Building trusted relationships are essential to making inroads with women clientele. Widmeyer says that “it just makes good business sense. Women will be exclusively in charge of managing the assets for an average of 16 years following the death of their husbands. And, 80 per cent of women will leave their Advisor within 18 months of losing their spouse due to the lack of a trusted relationship. The good news is that Advisors – both male and female – can build trust by meeting women where they are at in their lives.”

Specially-targeted events held in a no-pressure, no-sales environment can go a long way, especially those centered on issues relevant to women’s lives. For instance, a seminar for caregivers on power of attorney and other estate planning must-dos or perhaps an event about preserving brain health.

“More than 70 per cent of cases of Alzheimer’s and dementia are diagnosed in women, so let’s talk about brain health and its effect on our independence,” Widmeyer suggests. “Yes, it’s a slightly different approach from discussing the geopolitical influences on investment portfolios, but I think you’ll get many more women out to an event where you’re talking about an issue that directly affects their lives.”

Widmeyer insists that the investment industry “doesn’t need to colour everything pink” in order to better target and understand high net worth women.

“The demographics are shifting in Canada – not only is it getting older, it’s becoming increasingly female – and our industry needs to address this.

“At Richardson Wealth, we are expanding our advice and services platform in a way that speaks to the needs of women. At the same time, Advisors need to be fully cognizant of all the dynamics going on in the room during a client meeting and adapt their abilities to meet the expectations of women clientele,” she says.

“Bottom line, it comes down to trust and openness. More often than not, you’ll find that the discussion with a woman client is not directly about money once they consider you to be a trusted Advisor. And that’s the spot we’re all trying to earn.”

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