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Advisor Insights

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More Women Controlling More Wealth

With women holding more assets than ever before, advisors may need to alter their approach to planning.


Date: July 15,2015

Investing has historically been a male-dominated activity, but that’s starting to change. Women are making more money at work and are increasingly taking more control of their own financial success.

They are also living longer than men and receiving more money – through higher wages and inheritances – than ever before. The Boston Consulting Group estimated that in 2014, women controlled 29 per cent of global assets.

But is the advisory community equipped to meet the needs of female clients? Kristen Robinson, senior vice-president of women and young investors at Fidelity Investments, says there is a lot of great work going on to support women investors, but the industry needs to continue to evolve.

“It’s imperative that we provide opportunities and tools for women to become more engaged,” she says. “This includes providing content that covers topics that are important to women, that are relatable, and that show them steps they can take to plan for the future they want.”

Ms. Robinson says that some misconceptions about women continue to exist, including the idea that women aren’t interested in their finances.

“Fidelity’s analysis of more than 12 million investors in the U.S. shows that women actually demonstrate stronger savings rates than their male counterparts,” says Ms. Robinson. “When we look at retirement savers within the same salary bands – effectively removing the salary gap that exists between women and men – women not only save just as much or a little bit more than men, but they also achieve the same rate of return with less risk.”

Similar studies show that women overwhelmingly want to become more engaged in their finances. While this presents a big opportunity for the investment industry, it has yet to fully capitalize on it.

The financial advisory community recognizes it needs to make some significant changes to the way it approaches the client relationship with women, says Jennifer Reynolds, president and CEO at Women in Capital Markets, a network and advocacy group for professional women in the Canadian financial sector.

“Research indicates that 75 per cent of women change investment advisors within one year of a spouse’s death,” she says. “That, coupled with the fact that women control close to 40 per cent of investable assets in Canada, indicates that change is required in the industry.”

Advisors, she adds, are used to connecting with men and are often not attuned to the needs and preferences of women in terms of style of investing and the advisor-client relationship.

“Women are becoming increasingly independent and savvy investors, and advisors who ignore this market won’t be the ones whose businesses grow and prosper in the years to come,” says Ms. Reynolds. “Advisors need to learn new ways to market to women to attract female clients and be more analytical and research-focused.”

She points out that women, generally, trade less than men and take on less risk, which positively impacts their portfolio returns due to reduced trading fees.

“Women are focused on accumulation and preservation of wealth to meet their personal and family financial requirements,” says Ms. Reynolds. “They have a tendency to research investment alternatives with much more diligence and take time to make investment decisions.”

Ms. Robinson agrees that women tend to develop a more holistic view of their finances.

“Women are often less focused on performance and short-term returns, and instead take on a longer-term view,” she says. “In general, women’s focus is less on simply accumulating wealth, and more on how their investments can grow to help them live the lives they want for themselves and their families.”

It’s often argued that a greater proportion of female advisors would help – women advisors currently make up only 15 per cent of the financial advisor community.

However, Ms. Robinson refutes the common belief that women investors only want to work with women advisors.

“Financial planning is gender-neutral,” she says. “Women don’t have a preference for working with a male or female financial professional. They want straight, factual information that’s easily consumable, but not ‘dumbed down’ or ‘pinkwashed’ for them either.”

In the end, it’s more about recognizing how best to work with a potential client – of any gender, she says.

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